The Hornets will kick-off at Wembley on Monday as favourites to secure promotion having finished five points above Palace and taken four points off them during the season.
But Palace were also underdogs when they travelled to arch-rivals Brighton in the semi-final and triumphed 2-0, and Australia midfielder Jedinak insists they can pull off another surprise on the biggest stage.
"Both teams won their respective semi-finals in dramatic fashion and it's going to be evenly poised," he said.
"If we're going in as underdogs then so be it, but in my mind it's 50-50.
"We've got a plan we will be working on and hopefuly we can execute it the way we did at Brighton."
Wilfried Zaha's two goals sank the Seagulls and the winger will be playing his final game for Palace before completing a £15million switch to Manchester United.
"Wilf has got all the plaudits and rightly so, he's had a great season and he had a great game against Brighton," added Jedinak.
"But he knows, as we all do, that we can only achieve what we want to achieve as a team and we're all pushing towards the same goal.
"There is a big wall in the way called Watford and we are expecting a very tough game, we are going to have to earn it on the day.
"We have some great characters in the dressing room and in the team, they've been a real joy to work with.
"The success we have shared so far has held this group together but we have a job on our hands to get to where we want to be."