The Frenchman's withdrawal was met by fierce boos from the St James' Park crowd, who were apoplectic at full time as the Magpies slipped to a 2-1 defeat to Brian McDermott's side.
The 27-year-old's withdrawal was received with thunderous boos and jeers from the home supporters, but the Magpies boss insists he had little choice with the midfielder recently missing two months of action due to a similar problem.
The 51-year-old manager suggested he needs to make new signings to boost the morale of the squad, which has slipped to just two points above the Premier League relegation zone.
"[Cabaye] said to me five minutes before he came off that he was injured, he was struggling with his groin," he told reporters. "If one of the top players says that, I'm not going to go against his wishes to come off. I didn't want to take him off, trust me - we needed another moment but that's how it was at the time.
"We had to take Cabaye and that gave an adverse reaction by the crowd and the negativity spread around and spread to the team and that's where we are. We can't get away from that and we need to be able to play through it, and we lost our way a little bit."
Pardew admitted he was desperate to add to his squad after losing Demba Ba to Chelsea and seeing Loic Remy opt for a move to QPR rather than St James' Park.
"We need some impetus, there's no doubt, in the team," he said. We've lost Demba Ba and we've lost Cheikh [Tiote to the Africa Cup of Nations] and they're big players for us.
"Although Yohan was back today he's on his recovery really. We're trying to get him back as quick as we can and we couldn't risk him unfortunately and we needed him at that end period of the game. We need some impetus in terms of signings, we need a little boost to let everyone get their heads up."
Pardew was happy with his side's first-half performance against the Royals, but lamented its inability to add to Cabaye's 36th-minute free kick.
"I think first half we couldn't have played any better under the circumstances," he insisted. "You could see the extra quality we had on the pitch with Cabaye and at that point you'd like to think we were away from them.
"But second half we couldn't get a grip of the game and you have to say that Reading bossed that period, and as well as we defended at times we've given away two sloppy goals."
And the manager - who says he does not know anything about the Magpies' reported bid for Montpellier defender Mapou Yanga-Mbiwa - dismissed questions about his future, claiming he can get the Magpies through their tough run.
"I'm strong enough, and have been in situations before so that I can deal with where we're at but I think it's obvious that the team want a result and that would help every situation," he said.