Victory for the Foxes in their final home game of the season would see them jump from seventh place to fifth in the table and put the pressure on play-off rivals Nottingham Forest, who Leicester play on the last day of the campaign, Bolton and Crystal Palace who all kick-off on Saturday.
Pearson has told his team they must keep cool, calm heads during what promises to be an electric atmosphere and reproduce their performance last weekend at Palace, where they drew 2-2, but secure all three points this time.
"It is an important game, as they all are, but we have to keep our nerve," Pearson said.
"It is all right everyone getting excited about it, and I am really looking forward to it, but you have to be able to play these games in an intensity that we have played recently.
"We have to go into these final two games, firstly against Watford, and win by showing the same levels of intensity and the quality we have.
"They are huge games against sides in great positions, so it means if we beat them we can massively improve our situation. That is the main incentive for us."