Villa's caretaker boss acknowledges that this season has been a disappointment after three successive top six finishes in the Barclays Premier League.
But McAllister is confident the midlands club can look forward with optimism once manager Gerard Houllier - currently recuperating from a heart problem - has had time to stamp his mark on the club.
McAllister, who will again be in charge for the home clash with Wigan, said: "We should be looking at the European positions and that goes without saying.
"Everything is here and set up for that. That has got to be the target.
"You can't necessarily jump from sixth, seventh, eighth right up to those top four places.
"Everyone has got to hold their hands up and say those top four spots are very hard to obtain these days.
"There are loads of factors coming into play to get this club to that level.
"But that next group of teams is where Aston Villa have got to be targeting themselves without a shadow of a doubt.
Aston Villa vs Wigan Athletic Line UP
Aston Villa (4-4-1-1): Friedel; Walker, Collins, Clark, Cuellar; Agbonlahor, Makoun, Petrov, Downing; A Young; Bent.
Wigan Athletic (4-3-3): Al Habsi; Boyce, G Caldwell, Alcaraz, Figueroa; McCarthy, Watson, Diame; Cleverley, Rodallega, N'Zogbia.
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