The Blues, who were expected to challenge for the top spot this season under Andre Villas-Boas, have so far struggled for consistent form and find themselves 11 points adrift of first place in the Premier League.
Malouda insists that the Stamford Bridge outfit must now be realistic moving forward.
"We're finding it hard to make up ground on the top two," he said. "I don't think we can still think about the race for the title.
"The most important thing for us now is to make sure we catch up with Tottenham. We need to fix ourselves realistic targets.
"We've been unable to string together a good run, which is why we've been distanced in the table."
Malouda has scored 34 goals in 136 appearances since his arrival at the club in 2007.