The veteran coach recognised that defeating the Azzurri and moving past the quarter final stage was crucial and lifted a huge weight off everyone's shoulders in the squad.
Despite being praised for their performances this summer, Aragonés believes that Spain actually played better in the World Cup in Germany,
"Beating Italy changed the psychology of the team. Iker said that he was fed up with not being able to go further than the quarter finals," he told Marca.
"In the World Cup in Germany we played better, but we had less experience. France scored a goal against us then that they would not have been able to now.
Aragonés believes that incoming trainer Vicente del Bosque has the players to go on and be victorious at the next World Cup and thinks that the Euro 2008 success has helped.
"We can win the World Cup. The squad has an average age of 24 and I think that we can achieve that," he continued.
"We were just missing that one trophy that would allow us to move forward and now we have it."
After winning so many plaudits for their style, Aragonés compared his Spain side to the famous Brazilian team that swept to World Cup victory 38 years go.
"That Brazil side played with a holding midfielder and then had Gerson, Tostao, Rivelino. In a football sense, this Spain team is very close," he added.
Lucas Brown, Goal.com