The France international was reunited with his former Newcastle United manager Alan Pardew in July after a frustrating spell in Ligue 1 with Paris Saint-Germain.
His return to England has coincided with a superb run of form for Palace that has left the Eagles fifth in the table at the halfway stage of the campaign, above the likes of Manchester United, Liverpool and Chelsea.
Cabaye has featured in 18 of their 19 matches so far, scoring five goals, and believes they can maintain their form into 2016 to complete an impressive campaign.
"This [festive] period is very, very important," he told the official club website. "The thing is, we have to play with confidence.
"We have a very good team and some fantastic players - the balance of the team is right.
"We have to trust each other to play and to do the right things, then I think we can be the surprise of the season ... except [for] Leicester at the top!
"Hopefully we will stay around the European places, because I think that objective can become a reality.
"We've got the Premier League to focus on and also the FA Cup is a fantastic trophy. It's iconic, it's held in such high esteem."
Cabaye believes Palace's success is down to Pardew's revitalisation of the club, and claims the 54-year-old is more comfortable at Selhurst Park than he was in the North East.
He added: "In general he is the same [as at Newcastle]. I think he's more involved in the club at Palace. You look at the training ground, the stadium, everything; he's involved.
"For him he feels much better than he did at Newcastle, I think. What he's done from the start [at Palace] has been fantastic.
"I followed him, even when I left Newcastle. Every time I was watching Newcastle and then I was watching Palace, because we create something, him and me.
"We have a very good relationship, it's very faithful. He can trust me, I can trust him."
Cabaye eyeing European football with Palace
![Cabaye eyeing European football with Palace]()
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