He said: "It is a test of character for us now but I think the players have got the character, without a shadow of a doubt.
"There's no doubt Preston is a game where the players will have to show their character and that's what I'll be looking for."
Tuesday's defeat came after Holloway axed three players from his squad for a breach of discipline.
Barry Bannan, Neal Eardley and Ishmel Demontagnac were spotted in a Blackpool night spot in the early hours of Sunday morning.
Yet Holloway said: "I can't wait to play our next game and I'll try and pick a team that can go to Preston and beat them.
"I don't think there is any better game for us than Preston at the weekend. We need that now."