Spurs have won each of their last three in the Premier League to move to within one point of fourth-placed Chelsea in the table.
Frank Lampard's side, meanwhile, are without a victory in their last four top-flight fixtures - suffering two defeats in the process - but Nicholas has backed the Blues to run out 2-1 winners in Saturday's London derby.
"This is a massive game in the context of the top four. The serious interest is at the bottom, but the potentials for the top four is phenomenal. The fascination is Chelsea's home form, which has been awful. The youngsters have come out of the picture a bit, and it was always going to be an up-and-down season," Nicholas told Sky Sports News.
"Tottenham were patting themselves on the back after their match against RB Leipzig. But why? They turned up for 15-20 minutes. Son Heung-min is now injured, so what is their out ball?
"Lucas Moura played on the shoulder when he was scoring, so he could get in behind. But he does not link the play up; that is not his game. You can already see why they miss Christian Eriksen. They did get some fabulous money for him but you can see the difference in where Tottenham are going."
Chelsea recorded a 2-0 win at the Tottenham Hotspur Stadium when the two teams locked horns in the reverse fixture back in December.