The United manager lauded the Ivorian as one of his best three players this season and expressed his delight at seeing the 27-year-old back to his best.
Tiote put in a man-of-the-match display in Saturday's 1-0 home victory over Crystal Palace to boost Newcastle's hopes of qualifying for the Europa League.
However, Pardew feels that Tiote is benefitting from not playing in that competition this season, having done so in the last campaign.
"He's been terrific this year," Pardew, who is currently serving a stadium ban, told reporters of Tiote. "He's back to his very best.
"I would put him in our top three of the year. Certainly, since I gave him the armband he has been outstanding for us.
"He'll be somebody we are very keen to keep at this football club."
On the impact of the Europa League, Pardew added: "You only have to look at the teams who have played in the Europa League this season.
"It shows that it has a massive impact, and none more so than it affected Cheikh last year."