Palace, beaten for the first time in nine games, are 16th on 18 points, just a point above the relegation zone.
The Gunners have also been in good form, their only defeats in their last eleven league games have come against the two Manchester clubs, but there is a sense that too many points have been dropped in disappointing draws. But the hammering of Arsenal was the best of those three victories; the Eagles dominated the majority of the game, attacking at pace and pressing their opponents at a high tempo.
Last season, the Gunners were booed off at Selhurst Park as they fell 3-0 and saw their European aspirations recede after that game.
Palace will have striker Christian Benteke available for the visit of Arsenal after the Belgium global missed the clash at the Liberty Stadium through suspension.
Hodgson still finds himself without Mamadou Sakho whilst the Frenchman recovers from a calf injury, and will also be without Damien Delaney and Connor Wickham for the London derby. The Bosnian global last started a Premier League clash against Southampton on December 10th.
Jack Wilshere will continue his partnership with Granit Xhaka in the centre of midfield due to Aaron Ramsey's absence, while Alex Iwobi could support the triumvirate of Alexis Sanchez, Mesut Ozil and Alexandre Lacazette.
Hodgson's side are on an eight-match unbeaten run (W3, D5) - their longest top-flight run since a 12-match stretch in October 1990.
Paper Round's view: Arsenal boss Arsene Wenger appears to be the only person still hoping Sanchez might stay on in North London, having commented: "we have not been approached by anyone".