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The hard-fought result has led to criticism, with comparisons made between the narrow win and their 4-1 victory over England at the same stage four years ago in South Africa.
"We are much better than we were then [in 2010], it would be ridiculous to claim otherwise,” Muller said.
"We did not have the quality we have now. We were not able to develop our game from the back. We had to stand deep and wait for the counter. Against Argentina, we followed [Lionel] Messi with three players.
“Now we are much better: Our World Cup is far more sovereign than in 2010.”
However, the Bayern Munich forward did admit Germany were “really weak” during the first half against Algeria, while adding that they deserved respect for winning despite not being at their fluent best.
"We made mistakes in all areas of the team, but we won the game.
“When the Italians win such a game, people say: What kind of clever dogs.”
Germany take on France in their quarter-final clash in Rio de Janeiro on Friday.