The Bayern Munich midfielder feels that Joachim Low's young side have continued to develop during Euro 2012 and are among the best in the world, but must start to win trophies
Mario Balotelli scored twice in the first-half of Thursday's encounter, and although Mesut Ozil pulled a goal back with a late penalty, it was not enough to prevent a 2-1 defeat for the Germans.
Die Mannschaft had been one of the favourites to win the tournament, but Bayern Munich midfielder Kroos feels that Joachim Low's young team are developing well and will soon realise their potential by winning major competitions.
"It was a long season, especially for the Bayern players, but we showed that we are absolutely among the top teams," he told Sport1. "This will also be the case after the tournament.
"Of course we will try to develop further. In this tournament, you could see that we had much better squad depth than in the previous two tournaments.
"The coach could change two or three positions and there was never a loss of quality. I think we have progressed a bit further, but it is important that we eventually win a title."
Kroos also felt that Germany made too many mistakes in their defeat against Italy, and did not dominate their opponents enough to warrant victory.
"Our link up play was quite good, but it is always the case that if you concede two avoidable goals the game will go differently. There were times when we were better than Italy, but not enough.
"In the end we were the team that made two mistakes too many in a decisive game. This can prove deadly in a semi-final, especially against Italy."