Los Blancos' victory at Camp Nou saw them pull seven points clear at the summit of the standings with just four rounds remaining.
Tello insists that the Blaugrana will not throw in the towel but he conceded that they have accepted that the title is now bound for the Santiago Bernabeu.
"It's not lost yet, so we must keep fighting," the 20-year-old told GolTV. "But to come back now would be a miracle. Still, while the League is still there, we must keep continue to battle."
Tello also conceded that despite dominating possession and territory against Madrid, Barcelona had not been at their best in the Clasico.
"We always try to play football but today it did not always come together for us," the winger confessed.
"We expected a strong Madrid. They have come to play their game and they did well in scoring from a corner and getting another goal on the counterattack."
Tello is now hoping that Pep Guardiola's men can bounce back in Tuesday night's Champions League semi-final second-leg clash with Chelsea, admitting: "It's another final for us."
Barca go into the game against the Blues trailing 1-0 after last week's meeting at Stamford Bridge.