The Foxes are currently eighth in the table and level on points with Sheffield United, the club occupying the final play-off spot.
Pearson said: "We've shown we can compete at this level, but we are probably about three or four points short of where we would like to be, or could have been.
"We know that we have to be at our best every time we play because it is a step up for us. I think the psychological pressure as well as the physical pressure at this level is different from last season for us, the games are quicker and you really need a squad ethic to see you through.
"It is a difficult league and, technically, we have played some good sides already. I think Preston were a very good example of a very accomplished Championship side and they have the know-how to win.
"We know we can compete and over 46 games it will be a big test for us, but I don't see any reason for us not to set high targets and expect ourselves to be in the promotion shake-up."