Jose Mourinho's Real Madrid stole the north London side's European thunder with a crushing victory in the first-leg of their Champions League quarter-final.
However, Redknapp explained feelings that the Tottenham camp were positive and players are refusing to let the defeat get them down.
"The mood is good, fantastic mood," he said.
"We’ve had a great season, one bit of a blip the other day but that’s how it goes. We are in a great mood and I have not had to lift them really.
"I look at the whole season and how it has gone. We are not out of it yet. Nothing is impossible. Who knows what can happen? It has been a fantastic season."
Before Spurs can even think about how they can overcome Madrid next week, the White Hart Lane outfit will have to concentrate on a push for a top four spot as they face Stoke City in their weekend league fixture.
“I have always said it would be tough to make the top four but we managed it last year and we still have a good chance,” he continued.
“I want us to get as many points as we can. I’ve no idea how many we’ll need. It never works that way. You can’t pick results.”
The team still have a chance of a second successive Champions League qualification and despite picking up just four points from a possible 12, Redknapp is happy with his side's performances.
He added: “We’ve made lots of chances, but the form isn’t bad at all. We have had one defeat in our last eight league games and we are playing well.
"You can’t always win. I have been pleased with the way that we have been playing.”