Five wins in the last six games - against teams such as Chelsea, Tottenham Hotspur and Manchester United - have catapulted the Magpies to within four points of second place.
Pardew said that Tiote, who recently stood in as captain for the injured Fabricio Coloccini, is in top form at the moment, and described his performance in last week's victory at Old Trafford as one of his best for the club.
"He is playing very well," the 52-year-old told reporters.
"I was very reluctant to take the captaincy from him after he did so well with it, but he has proved to me, irrespective of whether he wears the armband or not, he is brilliant.
"I can reflect on the two Manchester United games. The 3-0 was the best performance he ever gave this football club, closely followed by that performance [last week], so he can do it against the top clubs."
Newcastle welcome Southampton to St James' Park this afternoon.