The Blades leapfrogged Leeds into second place with victory at Elland Road before the international break and hold a one-point advantage over their rivals with eight games to go.
Norwich have a four-point lead at the top, but Blackwell, assistant to another former Leeds and Blades chief in Neil Warnock at Cardiff, does not think the title chase is a foregone conclusion.
“It really does come down to who can mentally handle the last eight games the best,” said Blackwell. “The team that does will come out on top.
“Norwich look like they’ve just got enough and they’ve got some points to play with, but they’ve only got to lose one game and their advantage can be quickly wiped out. People are choosing one from Leeds and Sheffield United, but maybe it’s Norwich who will slip up.
“Their consistency throughout the season has been excellent though, so I don’t see them doing that. It’s such a tight finish, I think it’s been great at the top of the Championship. A cracking three-horse race.”
Blackwell, 60, helped Warnock steer Cardiff back to the Premier League last season.
He also won promotion to the top flight with the Blades in 2006 under Warnock.
“Leeds are more free-flowing at times and they create lots of chances,” said Blackwell. “The Blades are a bit more pragmatic. They grind the results out.
“When Leeds are on the front foot, they are very difficult to beat. But if there is a question mark it is defensively.
“The Blades seem to have more of a blend throughout the team. They’re quite strong at the back, they’re fairly steady in midfield and they can also get goals. But one point between the two? Do me a favour. It can turn on a draw. It’s too close to call right now.”
Blackwell guided Leeds and the Blades to the Championship play-off final during his spells in charge, and he has won promotion with Warnock on six occasions as an assistant, coach or player.
“Whoever goes up, they’re going to find the difference between the Championship and the Premier League is phenomenal,” he added.
“The pace, power, technique, crowds, expectations – everything. The games get dissected, what players do and what they don’t do.
“It’s massive and I think if we can keep Cardiff up then it will definitely be one of our biggest achievements.”