The Scot praised the Rossoneri for being clinical in front of goal and admitted his own side's failure to find the net summed up its frustrating Champions League campaign.
Goals from Kaka, Cristian Zapata and Mario Balotelli ensured the scoreline looked impressive from Massimiliano Allegri's perspective following seven games without a win, but Lennon thinks his side was stronger in attack despite the Rossoneri having improved since the reverse fixture in Italy.
"Milan has improved since the first game," the Scot told reporters after the Champions League clash. "I said before the game I wouldn’t take too much notice of their domestic form.
"We created more chances tonight than in San Siro. I didn't think we were outplayed; it wasn’t wave after wave of attack. Big moments change the course of the game."
Celtic sits bottom of Group H with three points from five games and finishing fourth is now a certainty but though Lennon regretted wasted chances and lackluster focus at times during the group stage, he believes just reaching the competition proper is an achievement.
"Tonight has been symptomatic of our campaign," he added. "We've missed good chances. I'm really disappointed with the two goals we've conceded from corners because we take a lot of pride in that. We lost our concentration.
"Big moments in the game changed the course of the game. Milan took their chances when they came along, albeit we were contributors to our own downfall.
"Realistically, getting into the Champions league was fantastic for us. When the draw was made we knew how difficult it was going to be."
Celtic plays Barcelona - which was beaten for the first time this season by Ajax on Tuesday - in its final European tie of the campaign on Wednesday Dec. 11.