Wullie Gibson believes Queens will have to win half of their remaining six games to survive.
The Palmerston side lost 2-1 away to table-topping Kilmarnock on Saturday and sit second bottom with 26 points.
Dunfermline, who have a game in hand this week, drew with Morton to pull level on points with the South. Hamilton beat Partick Thistle to go nine points clear of Queens in seventh place ahead of their clash this weekend.
Gibson said: “We have six games to go and I think we need to win at least three of them to stand a chance and we will be doing everything we can to win the games. After Hamilton’s result against Partick and Dunfermline picking up a point in their game, I do think we are in a three-way dog fight.
“Dunfermline have their game in hand tomorrow and hopefully Thistle will do us a favour but I see it being between the three teams and we’ve got to be the best of those three.”
Queens were nine minutes away from taking what would’ve been a huge point at Rugby Park. Ally Roy cancelled out Ash Taylor’s opener only for Oli Shaw to break Queens’ hearts with nine minutes to go.
Gibson added: “We have lost another game of football that is the reality, it was late on they scored and up until then, at 1-1, I thought we had a couple of chances to take the lead.
“I need to see their second goal back but it looked like a foul on Josh Todd, whether it’s inside the box or not I need to see again, but the ref has said he didn’t know either which suggests he knows there is contact but doesn’t want to give the penalty and within 10 seconds they take the lead.
“It’s fine margins but that is three on the bounce that we have lost so we need a reaction on Saturday away to Hamilton.”
The Queens manager did take a few positives from his side’s performance against the favourites for promotion compared to their last visit to Rugby Park.
He said: “We came here the last time and we folded 4-0 and it was a long afternoon so we do have to take heart from the
performance.
“We had good spells where we kept the ball, stuck to the game plan and stuck to our shape.
“On reflection, it is disappointing because we put everything into the game and came away with nothing.”