Saturday's 3-2 home win over Everton left the ex-Arsenal and Celtic man hugely impressed.
Nicholas was speaking on Sky Sports’ Soccer Saturday after watching Villa climb up to 14th in the Premier League table with three games left thanks to a Christian Benteke brace and Tom Cleverley goal.
Benteke opened the scoring with a ninth-minute header from skipper Fabian Delph’s cross, before adding his second on the stroke of half-time following Jack Grealish’s pinpoint corner.
Romelu Lukaku pulled one back from the spot just before the hour after Ron Vlaar’s poor challenge on Steven Naismith but Cleverley fired in Villa’s third to restore their two-goal advantage just five minutes later.
Phil Jagielka set up a tense finish when he headed in from close range in stoppage-time but Tim Sherwood’s side held on to claim three crucial points towards their survival bid.
While the club remain just two points above the drop zone, their improvement since Sherwood’s appointment has been staggering, having now bagged 17 goals in his 10 top-flight games in charge, compared to the 12 scored in the previous 25 league matches this season under Paul Lambert.
For Nicholas, their latest showing against Everton, who were on a five-match unbeaten run going into the weekend, emphasised just how far things have progressed in recent weeks, as the Scot singled out various members of the team for special praise.
“This is the best I’ve seen Aston Villa in a long time,” he said after the final whistle. “I know recently they’ve played well in the cup but, for me, it was all-round class.
“They showed energy, desire, positive off-the-ball running – it was all there today.
“They were maybe a bit nervous when it went to 3-2 but they really did look a good side today.”
Continuing on how things have changed from Lambert’s reign to Sherwood’s, he added: “For me, the essence of it is getting the right balance. I don’t think Paul Lambert ever got that right. He was cautious and didn’t use his quick players in wide areas.
“Now you’ve N’Zogbia and Grealish, as well as Cleverley and Delph showing their energy both on the ball and off it.
“Cleverley’s goal was stunning and Delph was absolutely magical for 60 minutes today.
“Meanwhile, Westwood just sits and hold things down. I’m not saying he’s Nemanja Matic there but he’s learned his job.
“Benteke was unplayable and, after watching Villa a lot this season under Lambert, this is by far and away their best performance.”