Sherwood refused, however, to blame Spurs' midweek trip to Ukraine in the Europa League for the defeat.
Robert Snodgrass's calm finish early in the second half was the difference between the two sides, and despite a flurry of chances for Tottenham the result could have been worse had the Scot's long-range free kick not hit the crossbar late on.
Spurs are fifth in the Premier League standings, six points behind Liverpool who occupy the final Champions League qualification spot after they defeated Swansea City 4-3 in a thrilling match at Anfield.
"That's the first really major setback that I've had (since taking the job) and we need to be spirited and show what we're made of," Sherwood, who took over from Andre Villas-Boas in December, told reporters.
Asked about the six-point gap to Liverpool, he said: "It looks big. It's a real blow to us but we've got to bounce back and we need characters in the dressing room to be able to do that."
Spurs have lost five of the nine matches they have played after a Europa League outing, the latest on Thursday against Dnipropetrovsk, but he did not use it as an excuse for Sunday's defeat.
"The result was very disappointing," he said. "The first half performance was disappointing, the second half wasn't but too late and if you don't take the chances which we clearly had you aren't going to win many football matches unfortunately.
"We were stronger in the second period so you can't use (tiredness) as an excuse. Second half we looked like we were the far better side."
After going behind, Spurs showed more attacking endeavor with Emmanuel Adebayor, Roberto Soldado and Nacer Chadli having opportunities, but overall they struggled for rhythm against determined opposition.
"We took a real blow early on in the second half going behind to a sloppy goal and then we started playing from there and created a few chances and unfortunately we couldn't take them," Sherwood added.
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