The Azzurri coach was impressed by his side's display against the Selecao and is convinced that they are progressing with each match
Emmanuele Giaccherini and Giorgio Chiellini got their names on the scoresheet for the Azzurri but goals from Dante, Neymar and a double from Fred consigned the European nation to defeat and second place in Group A.
Speaking to Rai Sport after the match, Prandelli said: "We had a great performance in the second half and deserved an equaliser, but against great players it takes nothing for them to punish you.
"I am very satisfied, as we played the second half with great character. The reaction was excellent, we attacked the space and at 3-2 we could’ve drawn level."
Italy's task was made even harder when injuries to Riccardo Montolivo and Ignazio Abate forced Prandelli into two first-half substitutions, but the 55-year-old coach was pleased by the response of his players.
"We were forced into two early changes, so it was tough, but after the break we saw our system and it worked."
Should Spain secure more than a point over Nigeria on Sunday, the stage is set for a repeat of the Euro 2012 final and Prandelli is looking forward to the challenge.
“We are looking for growth and these games help us grow a great deal, I believe. Spain are the best team in the world, so if we face Spain then we will recover our fitness levels and play Spain.”
Italy's defeat to Brazil ensures that their 31-year winless streak against the Selecao continues. Their last victory came when a Paolo Rossi hat-trick guided the Azzurri to a 3-2 win in the 1982 World Cup.