The 25-year-old began the season on a brighter note and even scored a wonderful goal on opening day against Fulham, but has since fallen down the pecking order behind Cheikhou Kouyate and Max Meyer.
However, Hodgson believes the competition for a place will help his side this season.
"We're lucky at the moment as we have competition for places in that [left-back] area of the field," said Hodgson, as quoted by Daily Mail.
"Jeffrey Schlupp didn't play, Meyer didn't start the game, I have Jairo Riedewald and Jason Puncheon too, which is quite a nice problem to have.
"We could have easily had six points from our last two league games, but it's four but I'm aware that's what football is, especially at this level because the teams are usually quite evenly-matched at this level," he added.
Although, Schlupp is struggling, his countryman Jordan Ayew lasted 71 minutes before he was replaced with Alexander Sorloth.
Palace currently sit 11th with seven points and will travel to The Hawthorns next weekend to face West Bromwich Albion.