The Hornets pulled within 1½ games of Southwest Division leader San Antonio, which is percentage points ahead of the Los Angeles Lakers for the best record in the Western Conference. New Orleans is third.
Jamal Crawford scored 20 points and Eddy Curry ended a month-long slump with 19 for the Knicks, who played without starting forward Zach Randolph (bruised right foot).
The Hornets fell apart in the fourth quarter of a 101-84 loss in Washington on Sunday, but handled the closing minutes much better in this one. With New Orleans up 90-88, Paul made a floater with 1:46 remaining, then found Chandler for an alley-oop dunk about 40 seconds later.
Paul closed the decisive stretch by converting a three-point play with 43 seconds left, making it 97-88.
New Orleans (40-19) surpassed its win total from last season. David West finished with 19 points.
There were 19 lead changes in the first half, which ended in a 49-49 tie after the Knicks' Jared Jeffries just beat the buzzer with a fast-break dunk. Paul scored 14 points in the third quarter, helping New Orleans take a 75-73 lead.