The Hull City boss has seen his side struggle in the league after winning their opening two games of the season, but they picked up a useful point against West Bromwich Albion at the weekend.
Phelan will be without the suspended Sam Clucas, while Ryan Mason is a doubt through illness, but he has vowed to name a strong side in the last-eight clash at the KCOM Stadium (kick-off 7.45pm).
Eldin Jakupovic, Andy Robertson, Harry Maguire, Tom Huddlestone and David Meyler are all pushing for starts and Phelan is expecting a tight game.
"Rafa Benitez has a very strong unit up at Newcastle and he is a very strong and experienced coach," Phelan told hullcitytigers.com.
"They're in a division that they don't really want to be in, but they're proving a handful and have one of the strongest squads in the Championship.
"He's had a response from the players there and they're top of the league so he's doing something right.
"We know we're going to be facing a strong Newcastle side, so from our point of view we need to be confident and concentrated.
"We'll have to take our chances. Both sides will be looking forward to this one and both sides will want to progress to the next round."