Many a title-winning campaign has been underpinned by a great goalkeeper. For much of this season, it has appeared Manchester City's challenge could be undermined by the last line of their defence. Now there are welcome signs that Joe Hart's awkward autumn may give way to a winter of content. He is starting to represent a formidable obstacle to opponents, not a barrier to success.

Like Liverpool, Crystal Palace departed the Etihad Stadium rueing his defiance and with first-hand evidence of his return to form. A manager who was irritated by questions about Hart was happier to field the latest. "He is the best goalkeeper in England," said Manuel Pellegrini whose selection policy, until Hart was recalled at Fulham on December 21, suggested he was only the second finest in the City squad.

Pellegrini's argument is that Hart has been revitalised by being rested, suggesting the goalkeeper tacitly supported his decision to promote Costel Pantilimon for seven league games. "Maybe he would not say it, but he agreed with me," the Chilean added.

Hart's comeback occurred at an opportune time. By City's exalted standards, the goals have dried up – a mere three in two games – and back-to-back home wins have been by the slenderest of margins. Palace, to their credit, ran City far closer than most of the division's big spenders. "It was like walking on eggshells," said captain Vincent Kompany. "You were worried what was going to happen on the break: was someone going to slip up?"

Hart did not. It is a peculiarity of football that a side can have 77% of possession and 23 attempts on goal and yet their keeper is named man of the match, but that was the paradox of City's performance.

"It was undeniable Joe pulled off a great game," said Kompany. "But sometimes it's not the amount of saves you make; it's about doing the right save at the right moment." So Jason Puncheon, Mile Jedinak and Joel Ward, who were all thwarted, could testify.

After Hart's Boxing Day blocks to deny Philippe Coutinho and Jordan Henderson, the process of making amends is under way. "Goalkeeper is a special position," said Kompany; it is unique in the way mistakes can be measured and their cost calculated. The early-season errors against Cardiff, Aston Villa and Chelsea mean Hart is still in the debit column, but with conviction and confidence restored, he could soon be in credit.

Something similar may be said of Pellegrini himself. If City's initial stumbles were partially attributable to his teething troubles, the manager has displayed an ever surer touch in a run of 10 wins and a draw. Even when his squad rotation looked like backfiring, Edin Dzeko struck to tee up a statistical first this season: a 1-0 win. "I would prefer to win by three or four but it is useful to win this way," said the manager, whose reign has contained a series of 1950s-style scorelines. After the 7-0, the 6-0 and the 6-3 came a result that was more George Graham's Arsenal than Matt Busby's Manchester United. "A team that wants to win the title must have a lot of different faces," said Pellegrini, whose poker face has been a feature of the routs.

Yet an austere exterior camouflages the cavalier within. When Palace hinted they could become the first visitors to depart the Etihad Stadium with a point, Pellegrini reconfigured his team, sending James Milner to right-back and leaving Javi García alone in the centre of midfield behind a front five.

His increasingly influential substitutions have become a feature. Less typical was an unfounded assertion that Palace played anti-football. Instead, the counter-attacking underdogs posed a threat to goal and goalkeeper alike. Hart required five stitches after diving in to halt Cameron Jerome. He ended with a bruised cheek, rather than bruised pride. Times have changed.

Man of the match Joe Hart (Manchester City)