The Portugal international has conceded that los Blancos came off second best to their city rivals, but stressed that it would be wrong to read too much into the defeat
Diego Costa's 11th-minute strike proved to be the difference between the sides, thus handing the Rojiblancos their first Liga win over their city rivals since 1999.
Speaking after the game, Ronaldo refused to make any excuses for the loss but called for a sense of perspective, despite the fact that Madrid now trail leaders Barcelona and Atleti by five points.
"We did not play well; we did not deserve to win," the 28-year-old forward was quoted by Sport.es.
"Atletico scored an early goal and won the game well. It wasn't comfortable for us because we had to play against them with all their players behind the ball. So it was difficult to score.
"We should not dramatise this. We should keep our heads up, fight and keep working because we have a lot to win this year."
Los Colchoneros have made an excellent start to the season, with matchwinner Costa their star performer, having scored eight goals in the opening seven league fixtures to help his side maintain a 100 per cent record.
However, despite Madrid losing touch with the early pacesetters, Ronaldo insisted that their is plenty of time to rectify any wrongs and backed boss Carlo Ancelotti to turn los Merengues' fortunes around.
"It's a big advantage," the former Manchester United attacker said when asked about Madrid's five-point deficit.
"But we must continue to work with the hope that we will have a phenomenal season. We are not perfect but we've not become a bad team.
"Some things change because we have new players and tactics but let's not dramatise. We have a great squad and a great coach - we must be united to win titles.
"[Ancelotti] is a great person and a great coach, who does a phenomenal job. This defeat is the fault of the players and we have to keep working. You can't always play well."
Atleti's win moved them to 21 points from seven games, level with Barcelona at the top of the table, while Madrid are third, with 16.