But Derry is confident they can see off Mick McCarthy's men at the second time of asking and boost the Selhurst Park coffers with a visit from Champions League hopefuls Villa.
"We know the potential is there to progress to the next round," said the midfielder. "We have showed that we are not going to be overawed by big names or big reputations, and we were within six minutes of going through.
"But now we have home advantage and that will be vital. Selhurst is not a nice place to come for away teams."
A cup run would lift some of the gloom at Palace, whose financial problems meant they had to cash in on teenage star Victor Moses in a £2.5million switch to Wigan on transfer deadline day.
The players only found out the club was in administration, and would be deducted 10 points, when they arrived in Newcastle for last Wednesday's Championship fixture.
The points deduction saw Palace, who were on the verge of the play-off places, plummet down the table - but Derry insists no-one is dwelling on the disappointment.
"We have a different emphasis on what we want to achieve now," he added.
"It was strange - we got on to a plane to Newcastle looking at the top six and we got off it looking at the bottom three. In a 50-minute plane journey we had dropped 11 places.
"So you have a different outlook on the remainder of the season. But what we have said to each other is not to think of ourselves as a bottom-four team because that was out of our hands.
"We don't think of ourselves like that, we think of ourselves as good Championship players and we are going to try to continue to be that for the rest of the season."
Crystal Palace v Wolves Clean Sheet: Crystal Palace 21/10