The Newcastle United boss is currently in talks with the London club over succeeding Neil Warnock, with Millen in interim charge at Selhurst Park.
Millen oversaw Sunday's goalless draw with QPR and will prepare Palace for Thursday's clash with Aston Villa, although confirmation of Pardew's appointment is expected over the coming days after Newcastle granted permission for talks to take place.
Speaking at a news conference on Tuesday, Millen said an agreement had not yet been reached with Pardew but stated it would benefit the club to have things wrapped up as soon as possible.
"I spoke to the chairman last night who said that compensation was agreed and he had permission to speak to Alan," Millen explained.
"It's not been signed and sealed and there are still negotiations to be had but when I have done the [interim] job [in the past] and it has dragged on the uncertainty wasn't good.
"You don't want it dragging on for weeks on end because the players need guidance."
Millen is unsure whether he will be retained should Pardew be appointed.
"I don't know - that will be Alan's decision," he added. "I told the players that and I am preparing the team for Aston Villa.
"I wasn't surprised. Alan has played for this club, he has a lot of fond memories and it means a lot to him.
"Palace is a good job for someone. The chairman wants to build on the success we have had."
Warnock was sacked on Saturday following Palace's comprehensive 3-1 reversal at home to Southampton on Boxing Day, with the 66-year-old managing just three Premier League wins since his appointment in August.
Millen felt Warnock's reign was decided on fine margins and was always likely to prove difficult after the surprise exit of Tony Pulis.
"It would be difficult for whoever came in after Tony Pulis," Millen added.
"We had a good start and the last five or six games we weren't far off getting results, but things went against us."
