The Manchester United boss, who travels to St James' Park on Sunday to face Pardew's side, described the former West Ham United man's work as "a great job".
The Scot has claimed that Pardew has got all of his players performing well and, despite not being the Newcastle fans' first choice, he has now won them over.
"I think he's done a great job, that's obvious," Ferguson said. "We all know he wasn't anybody's choice up in Newcastle, now he's everybody's choice.
"He's done it on the back of selling quite a few players at the time. Obviously, they looked upon the financial position of some of the players and decided to cut the costs and bring in players on much lower salaries and they're all performing."
Pardew was awarded an eight-year contract at the Magpies last week.