"It is fair to say that this will be the biggest West Yorkshire derby between the teams in living memory because there is so much resting on it," Jackson told Telegraph Sport.
Justin Morgan urges Hull KR players to ignore the form book ahead of derbyRadiohead, Kings of Leon and Arctic Monkeys to headline Reading and Leeds FestivalsTalking Racing: Locals fear lightning may strike twice at Dubai World Cup weekend"Over recent years Huddersfield have had the upper hand in the local derbies but it will be a special game and special atmosphere because you have two sides with so much to play for this season.
"It is a vital clash and whoever gets the win will be thinking that they can push on and go up automatically so you can't over-estimate what an important game it is for both clubs even though it won't actually decide anything.
"It will be a cracking game and there will be goals because Huddersfield are renowned for attacking and getting men forward which could give Leeds the chance to counter-attack.
"Ultimately, it will be close and there will be plenty of goals but while I won't put my head on the block and say which will it will go I can say with some certainty that it will be entertaining."
Whatever happens this weekend, Jackson, who was in charge of Lincoln City until earlier this season and was beaten to the Bradford manager's job by Peter Taylor, believes Huddersfield and Leeds could face each other again next season in the Championship.
"Both clubs could end up getting promoted although one might have to go up via the play-offs," he said. "You certainly couldn't rule out that scenario, particularly with the form that Huddersfield have come in to recently.
"They are unbeaten in ten while Leeds have wobbled over the last two months so they will regards this derby as the perfect way to invigorate the rest of the campaign.
"But it is a very competitive division thanks to Norwich, Colchester and Swindon who are all doing well. There are some good sides and this is probably the hardest it has been in living memory for teams to get promoted."
Jackson has certainly been impressed with Huddersfield manager Lee Clark and is convinced that the future is bright at his old club where he was also skipper.
"Lee has signed some terrific players who are all young, keen and hungry but they will be judged on where they finish at the end of the season. Lee has settled into his first job really well.
"He has plenty of experienced staff around him and to have won three times away from me when that has been the team's Achilles heel
"Their home from has been excellent and they are in a good position to get up. It is an up-and-coming club. I have met the new chairman there, Dean Hoyle, and he is keen and enthusiastic but most importantly he is backing Lee in everything he does. You can see he is passionate about the club and Town are really moving forward now."
Bradford-born Jackson, 48, had two spells in charge of Huddersfield and even resisted Leeds overtures.
"I was at Huddersfield and they approached me," Jackson added. "I turned down the opportunity to talk to them because I was in the middle of a play-off situation with Town so I declined.
"I never beat Leeds when I was Town manager although we did play them in the Carling Cup and drew what was a record crowd of about 34,000 to Elland Road. We lost 1-0 but we were two divisions apart."