Chelsea's title hopes evaporated against Everton on Wednesday night after their goalless draw left them six points adrift of leaders Manchester United, who also have a game in hand.
Coach Guus Hiddink accepts their title ambitions are all but over and now wants to focus on success in the Champions League and FA Cup.
Lampard produced another fine performance against the Toffees but could not unlock their stubborn defence.
However, the England international set up both goals as Chelsea beat Arsenal at Wembley on Saturday to reach the FA Cup final and was inspirational in their dramatic 4-4 draw with Liverpool which saw Chelsea progress to the Champions League semi-finals.
But he has failed to make the PFA shortlist and Germany international Ballack is stunned by his absence.
"Frank has played consistently at a high level all season," said Ballack.
"I don't know why he was not nominated but at Chelsea we know how good he is and that is all that matters."
Chelsea suffered a slump in form at the start of 2009 and coach Luiz Felipe Scolari was subsequently sacked.
But their form has been transformed under interim coach Hiddink and Lampard has played a key role in a successful run that has seen them lose just once.
The PFA six-man shortlist is dominated by Manchester United players.
The winner is announced on Sunday and Nemanja Vidic, Ryan Giggs, Rio Ferdinand, Edwin van der Sar and last year's winner Cristiano Ronaldo are all in the running, along with Liverpool captain Steven Gerrard.
Ballack, who has been in impressive form himself alongside Lampard and Michael Essien in Chelsea's midfield, is adamant that the England ace should have been among them.
"It is easy to play with Frank because he is such a good player," added Ballack. "He knows what myself and Michael have to do and whether we should be in an offensive or defensive position.
"I play a little bit behind him but I don't have to tell him what to do. He always does the right thing, depending on where myself and Essien are.
"Frank is one of the best players in the world for sure and I don't think there are many players in the Premier League like him."
Hiddink may now rest one or two of his players for the trip across London to West Ham on Saturday.
Chelsea play Barcelona in the first leg of their Champions League semi-final on Tuesday and are already without defender Ricardo Carvalho.
He has suffered a recurrence of his hamstring injury and will not travel. Hiddink also has a problem at left-back with Ashley Cole suspended but England youngster Michael Mancienne could be handed the unenviable task of trying to stop Barca's Lionel Messi.
Portugal midfielder Deco is also facing a race against time to be fit enough to face his former club.
He is struggling to overcome a hamstring problem but admits Messi, who started training with the Barca squad during Deco's spell at the Nou Camp, will be difficult to stop.
"He was 17 when he started training with us," said Deco. "He is still young but now he is a fantastic player and at the moment everyone is saying he is the best player in the world.
"Maybe he is, but his style is difficult to stop because he keeps the ball so close and he is small.
"We know this but we have a good defence, for me the best defence in the world, and we will see.
"The first time Messi trained with us he was very quiet and timid but we started to talk to him and we liked the way he was because he showed many qualities. As soon as he came to train with us we could see that he was special."