Sakho joined the south Londoners on loan from Liverpool in January and has made an immediate impact at Selhurst Park.
Palace have conceded just one goal in four games since Sakho came into the side, with Saturday's shock victory at Chelsea helping the Eagles climb four points clear of the relegation zone.
Allardyce's side are now on course to retain their top-flight status and the Palace boss has hailed the loanee's role in his team's upturn in form.
"The leadership from the back is very important and Mamadou Sakho has been at the heart of that on and off the pitch," Allardyce told Palace's official website.
"Every team that doesn’t concede goals stands a chance to win games, whether they are dominating or not in the match.
"Chelsea dominated most of the game, but because our defensive work was so good, we were able to maximise possession on the day."
Palace have had little time to enjoy their Stamford Bridge success and travel to Southampton tomorrow night.
The Eagles are set to be without Scott Dann due to injury and Allardyce has called for his squad to continue their winning streak on the South Coast.
"Our latest injuries will test the squad but we do have replacements to come in," Allardyce added.
"Our real focus is to go to Southampton and continue our undefeated run.
"We now have more points than games played with 31 from 29 and that is always a good place to be when in our position in the table."