The Villans are mired in the relegation zone ahead of their trip to face Stoke on Saturday, but the former Norwich boss remains optimistic about their survival chances
The Midlands club has picked up just 30 points from 31 Premier League games this term and occupies the final relegation spot by virtue of goal difference.
However, Lambert says his players could even earn a mid-table finish should they "hold their nerve" during the run-in and stick to their footballing principles.
"When you look at the table, only four points separate us from the twelfth team. That's nothing. It's a game away," he told reporters. "Everybody has to play some really hard fixtures. It's how you hold your nerve. We try to keep the place upbeat in the way it is. But we don't like a team that is playing with nerves.
"You have to have a good form of mental strength in this situation. You have to have a strong mentality where the pressure doesn't get to you and you see it through.
"If you do that, that's half the battle. I think it's both mental and physical attributes needed. You have to match the physical prowess with keeping a level head.
"They have to do that, continue to play their football and try to create. We have goals in us, we know that but we know we have to defend too.
"But when the lads get asked questions, they come up with answers especially against QPR and Reading over the past few weeks.
"They know what it is like, the magnitude of the games. We have been down there most of the year so it's not new to us. It might be new to one or two who get dragged into it.
"That's where the pressure comes. The thing for me is that they are confident in having the ball. It is not as if they are frightened by it and just want to launch the ball up the field. It is not the way to play. I think they are playing with a bit of freedom."
The Villans face a daunting trip to Stoke on Saturday, but the Scot is hoping his side can show the form which saw it earn a draw against the Potters earlier this season.
"Stoke have had a bit of a hard run of it of late as well. I am sure Tony would like more points than he has got but we are only four points behind them. That's the reality of it," he added.
"You know you are going to have to physically match them. You know the ball is going to come into your box and the tempo they play, you are going to have to match that.
"But we did it here during the season when we competed really well against them and we are going to have to do exactly the same this weekend.
"I thought we played decent that day earlier this season and had a lot of the ball. Everybody knows Stoke are a threat at set plays.
"You know it's going to come into your box and you have to deal with that and we did that that day. We're going to have to do that again. You have to match them. But we have to play our own game. It is important we play our own game."