Defoe is on the brink of rubber-stamping his move to Wearside from Toronto FC, with Pardew conceding Palace were forced out of the race for the former England striker.
Palace have secured Arsenal forward Yaya Sanogo on loan with new Eagles boss Pardew aiming to sign another striker during the January transfer window.
The former Newcastle manager grudgingly admitted Defoe's goal scoring prowess could ease Sunderland out of the Barclays Premier League relegation battle.
"I think it's a good move for Sunderland to have secured Jermain, I think he's a goal scorer and Gus (Poyet) will be the first to tell you they need more goals," said Pardew.
"So it's a good signing for them.
"We tried to get Defoe, but probably a bit late in the loop on that one.
"I wouldn't say we were that close, no.
"It never really got to the stage where I got to speak to Jermain, so I would say we were not that close."
Pardew managed Defoe at West Ham before the prolific striker moved to Tottenham.
The 32-year-old failed to warm to life in Toronto after leaving Spurs for the MLS a year ago.
Pardew was forced to admit the 55-cap forward could boost Sunderland's firepower with the Black Cats one of Palace's main rivals in the battle to avoid the drop.
The Eagles' new manager, however, warned that Defoe must first prove he is capable of playing week on week to fulfil his Sunderland brief.
"He's still got to step in, I don't know the last time Jermain had a run of three or four Premier League games," said Pardew.
"He'll be asked to start every week at Sunderland, so I think he's going to have to grasp it quickly.
"But he's a goal scorer, he opens up the goal with both feet and gets goals that (make) you question your back four, he makes you think 'how did he get that?'
"But that's his ability, you don't really know which side he's going to go, and he makes it difficult to stop him scoring goals.
"I think he'll do well for them, I think it's a good signing.
"But it's like anything, he'll need a goal early, all strikers need that for his confidence."
Chairman Steve Parish has not shied away from his desire for prudent transfer market dealings to safeguard Palace's long-term future.
Neil Warnock replaced Tony Pulis at the helm in August but was sacked in December after a run of one win in 11 games.
Pardew is itching to make changes at Selhurst Park, but vowed not to interfere with Parish's financial planning.
"The finances are so complicated, it's so expensive, that you have to have a realism and understanding as a football manager that the football club must always come first," said Pardew.
"Our requests and demands can only be met to the maximum that the finances will allow.
"And I wouldn't want the club to put itself at risk, particularly this club, I know it well, and we've had tough times in the past.
"Steve needs to make those financial decisions.
"I can only ask as a football manager for what I think we need.
"He's well aware we need to get a couple more players in if we can, and I don't want to put any more pressure on him than that."
Source : PA