Newcastle have given themselves a chance of survival, by taking four points from their last two matches.
The Magpies have beaten Swansea City and drawn with Manchester City to move to within two points of safety.
Newcastle now have four matches remaining to escape from trouble, and the difficulty of their remaining contests varies.
Newcastle face a tough match against Liverpool at the weekend, and their final match comes against Tottenham Hotspur.
However, Nicholas feels that the Tynesiders may be able to beat both Palace and Villa to ensure that they have a chance of staying up.
“Liverpool - I don’t see much because they’re flying at the moment,” Nicholas admitted. “But Palace and Villa at home, there’s potentially those two games. And I think if they can get to the last weekend and have a chance of staying up they would take that.
“I know it’s Spurs [on the last day of the season], but it doesn’t matter. It’s about survival.”
Newcastle did look doomed, but their recent revival has been encouraging.
The Magpies will now be looking to build on their momentum on Saturday, and if they are able to beat Liverpool they could move out of the bottom three.