The Magpies head into Thursday's quarter-final, second leg clash with Benfica trailing 3-1 after last week's trip to Lisbon, knowing a side which has not lost in 31 games in all competitions stands between them and their dreams of a place in the last four.
Pardew said: "There's only one team which has beaten them by two clear goals, and that's Barcelona, so that's the size of the task, so we are under no illusions there."
He added: "This is a Champions League team, really, and if it weren't for Celtic's fantastic performance in the group, they could have been competing tonight in the Champions League.
"That's the quality we are up against. I don't think there are going to be many better sides that have played here than Benfica.
"They have a slightly different style to a Premier League team. They have some fantastic technical players - Gaitan, Rodrigo, Cardozo and Lima.
"They have a real, real threat on the counter-attack, and the game could get away from us, it could easily get away from us, so we have got to be very much on our guard that we approach it in the right manner, give ourselves a chance and try to get us to the end of the game in a position where we can get it back.
"I would still feel confident two goals down with 10 minutes to go, the way that we are and the potential we have in the group, and the way I can affect it off the bench."
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