Chelsea, who romped to the title last season eight points clear at the top, are 14th in the table after 21 games, six points above the relegation zone.
“We all like to look forward, but don’t be unrealistic when you are six points above the relegation line, that is a fact,” Hiddink told reporters on Friday.
“I think so, relegation is a reality… we have a little bit more of a breathe, but we have two very difficult games coming up, who have a very good away record in the last 10 games.”
Brazil forward Alexandre Pato has been linked with a move to Stamford Bridge during the January transfer window, according to British media reports.
Hiddink, however, said he was happy with the strikers he has at his disposal and that the club were not active in the transfer market.
“No, we don’t have to sell players to bring in. I’m happy that (Loic) Remy is now working a full week with high intensity, and if needed he can be on the pitch,” the former Netherlands manager said.
“That’s good. As long as this is happening, we are not very active in doing other things.”
The Dutchman also confirmed last season’s Premier League player of the year Eden Hazard, who is yet to score in 27 appearances this season, will miss the Everton game on Saturday.
The 25-year-old could make his comeback against Arsenal on Jan. 24.
“Although he is back on the training pitch, he is not yet fit. We’ll make a decision on whether he will be able to face Arsenal next week,” Hiddink said.