After a dreadful run of form, Benitez thought he had turned the corner with a win over Arsenal to secure their first triumph since September.
That impressive result, though, did not lead to another as a Conor Gallagher netted a brace in a 3-1 win for the Eagles, bringing Everton back down to earth with a bump.
It's now one win in ten for ex-Liverpool boss Benitez and whilst he will be under massive pressure to turn things around, Allardyce told talkSPORT breakfast that it's not just down to the coach.
"He'd be devastated," the former Toffees manager said.
"I think that the man, with his experience and what he's done and where he's held in the football world, people will have expected him to do an awful lot more than he's doing at the moment.
"I think that like everything else, you can only be as good as your players and that is the factor we all have to face.
"Unfortunately the Everton players at the moment are not performing to the level that they certainly started off at the start of the season.
"As always if you get a few injuries, it doesn't help, it can stop your run of good form but certainly this run has plummeted them into a really serious situation.
"One win in ten and that is something that, at Everton, will be seriously looked at. You get a bad run, normally you don't last very long so you'd have to wait and see what happens with that one."
Undoubtedly, confidence is very low at Everton right now, but with that said, Richarlison's behaviour when he was substituted against Palace was something that will not help the Toffees, according to Allardyce.
"You know when you see Richarlison doing what he is doing, it's not the best thing you want as a manager when he starts shaking his head.
"You look at that situation and that's the last thing Rafa needs at the moment, an individual like that just showing petulance.
"That can reverberate around the world in the press saying the manager's lost the players and that sort of stuff."