The South Londoners beat Ipswich 1-0 at Portman Road in midweek to move three points clear of the bottom three.
Oliver Glasner’s side have scored just four goals at Selhurst Park this season and won just one of seven games on home turf.
But the City boss believes they are performing better than their 17th position suggests.
“They are playing really good,” said Guardiola.
“[Negative] results sometimes they can happen, but it’s not because of how they play.
“The last 10 games of last season, they were one of the best teams.
“Their physicality at Selhurst Park, the patterns they have are really good. so aggressive - they are really good.
“It’s so difficult to make a good build up against them and the quality is there.”
Pep was also asked about any possible Kevin De Bruyne contract extension discussions.
He responded: “I don’t know. I’m not involved in that. I would like to have a 23 year-old Kevin and sign a contract for 10 more years.
“There are players that impact the legacy of this club and will be there forever.
“It’s not easy, but in the moment it’s going to happen we’ll see.”
Watch part one of Pep’s press conference by playing the video above...
