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On the night he equalled former Manchester United manager Alex Ferguson's record of overseeing 810 Premier League games, Wenger watched the brilliant Sanchez turn an exciting match with two superb second-half goals in the space of four minutes.
Shkodran Mustafi had given the dominant visitors a deserved lead after 25 minutes but Arsenal were made to rue a host of first-half near-misses as Palace roared back soon after the break with a well-worked Andros Townsend goal.
Then Sanchez, whose future at Arsenal remains uncertain, demonstrated his world-class talent, first with a thunderous 62nd minute snap shot and then a lovely piece of control and fine finish from Jack Wilshere's long, precise through ball.
Despite James Tomkins ensuring a nervy finish for the visitors with an 89th minute headed goal, the win left Arsenal still in sixth place but they moved on to 37 points, alongside Tottenham Hotspur and to within a point of the top four.
Palace, beaten for the first time in nine games, are 16th on 18 points, just a point above the relegation zone.
There must have been much satisfaction for Wenger, whose own future at Arsenal had never been more hotly debated than when his side lost this same fixture 3-0 at Selhurst Park in April last season.
That defeat inspired the Gunners' successful run which ended with an FA Cup triumph and Wenger will now be hoping this victory could start another impressive sequence at the start of 2018 as they chase Champions League football for next season.
What part Sanchez will play for him remains unclear but the Chilean, whose name has been consistently linked with a move to leaders Manchester City, could not be faulted and neither, naturally, could his skill.
After Townsend's well-worked equaliser assisted by a pinpoint Wilfried Zaha cross had changed the game's complexion, Arsenal's nerves were settled only when Palace striker Christian Benteke hit a poor clearance out of defence, a mistake that ended with Sanchez rifling home the visitors' second in the 62nd minute.
Sanchez's excellence prompted the inevitable question to Wenger afterwards about whether he was fearful of losing the Chilean, especially with the striker's contract expiring at the end of the season.
"I am not fearful but that will be a subject that arises because of his contractual situation," Wenger told Sky Sports.
"Overall it was a convincing win even though in the second half it was harder than the first. We found the resources to score two great goals and from then we never gave up.
"We have come here and it is a difficult game for everyone in the league. We suffered a bit but for the biggest part of the game we played well."
Still, Palace, who have become a completely different proposition since Roy Hodgson took charge with them languishing at the foot of the table, pressed to the end with Tomkins' header ensuring a frantic finish.
"We showed we are a good team and we have quality players in our team. For us, it is a question of keeping fighting. Even at 3-1 down to a team of this quality, there was no resignation or sign of not doing the right things," Hodgson said.
"Had the game been five or six minutes longer, maybe we could have got something."