The Eagles had been beaten 1-0 by both Manchester City and Tottenham in their previous two Premier League outings but responded with a professional performance at Vicarage Road to come away with a vital victory courtesy of Yohan Cabaye's 71st-minute penalty, delighting Pardew.
"Sometimes you want a performance that really lifts you and this lifted me because the concentration levels were really high," he told Sky Sports.
"The back four were terrific and along with the goalkeeper they did not give Watford too much daylight at all today. That didn't really take away from our threat. Our wide players caused them a bit of trouble here and there.
"We got ourselves a really great win in a tight game because we've lost two tight games we didn't really deserve to lose in my opinion, particularly the City game."
Pardew added: "Drawing against City, drawing against Spurs and drawing here would be fantastic but if we keep going for the win it makes up for those games where the margins cost us.
"It was very important we won today and I'm very pleased."
The victory lifted Palace to sixth place on the league table.