The side are currently seventh in the table after 20 games, two points behind fifth-placed Manchester United, with McArthur believing Pardew's shrewd stewardship had put them in contention for a European berth.
"He's been unbelievable. To come in when the club were in a relegation battle, and not looking great to be honest, he's turned it around and made a really good side," the Scotland international told British media.
"He probably doesn't get the credit he deserves but that's probably a good thing for Crystal Palace. We don't want him to get too much credit and start getting linked with big jobs.
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"I'm not really concerned about that because he's a great manager for Crystal Palace and we want him to stay here as long as he can."
Pardew's performance has not been overlooked by co-chairman Steve Parish, however, who last week told the BBC the club wanted their manager to "stay at the club a very long time".
"But who knows what will happen, if Real Madrid want Alan Pardew then I'm sure we wouldn't stand in his way," he added.
Fortunately for Parish and Palace, Madrid replaced sacked manager Rafa Benitez with Zinedine Zidane on Monday.
Palace visit Southampton for an FA Cup third round tie on Saturday, followed by league trips to Aston Villa and Manchester City.
(Reporting by Shravanth Vijayakumar in Bengaluru; Editing by John O'Brien)
