The Blues saw their six-game winning run come to an end in the Premier League on Saturday evening with a 2-1 loss to title holders Manchester City.
Chelsea FC earned plenty of plaudits for their performance at The Etihad as goals from Kevin De Bruyne and Riyad Mahrez cancelled out N’Golo Kante’s opener.
Frank Lampard’s side came from 4-1 down to draw 4-4 with 10-man Ajax in their last group-stage fixture at Stamford Bridge.
Chelsea FC are in second place in Group H but level on seven points with leaders Ajax and third-placed Valencia in a tight pool.
The Blues lost 1-0 to Valencia in their group-stage opener at Stamford Bridge as Lampard took charge of his first Champions League game.
Former Arsenal midfielder Nicholas is backing Valencia to do the double over Chelsea FC by securing a narrow win on Wednesday night.
“This is a very good game. Valencia beat Chelsea at Stamford Bridge. Chelsea are much improved since and you could see that against Manchester City,” Nicholas told Sky Sports.
“This is the most exciting Chelsea team I have seen. It does not have the same quality as the one which involved John Terry, Didier Drogba and Frank Lampard, but they are far more exciting to watch.”
Nicholas added: “Chelsea were outstanding for 30 minutes at the Etihad – it was more City-like than not. They didn’t get anything and that tells you something though. Valencia do not score a lot, but they do not concede.
“The Chelsea results against Ajax will be enough to see them through, but I am going for a defeat here. It will be a learning curve for the team. Lampard is using the same players here, so it does take its toll, especially in the demanding games. Injuries could lead to downfall.”
Chelsea FC lost 5-4 to Liverpool FC on penalties in the Uefa Super Cup earlier this season to miss out on a first trophy under Lampard.
The Blues are unbeaten in their last nine away fixtures in Uefa competitions, winning seven times and drawing twice.
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