The Azzurri kept up their impeccable record against Joachim Low's men in battling to a 1-1 draw, and the coach was pleased with his players' performances despite failing to win
Mats Hummels gave the Mannschaft an eighth-minute lead as he headed Toni Kroos' corner in off the post, but the Azzurri pulled one back through Ignazio Abate in the 28th minute.
Joachim Low's men dominated much of the match and Prandelli acknowledged that his team still have plenty of work to do to match the best sides in the world.
"In my view we played a good game. We struggled a little with their passing, as they played without strikers, so it was tough at the start to figure out how to approach them," he told Rai Sport.
"It [the Germany goal] was a corner and clearly we have to improve a lot, especially on set plays.
"We wanted numerical superiority in midfield, it worked and we had around 20 very strong minutes in which we had the opportunities to win.
"Germany are one of the strongest sides in the world. If we think that we're the best and can dominate Germany, then we're wrong."
Much of the pre-match build-up had focused on Italy's impressive record against their visitors, and the Germans have now not won any of their last eight meetings - a run that stretches back to 1995.