The two sides met in Recife with a place in the last-16 at stake, and it was Mexico who delivered a convincing display as second-half goals from Rafael Marquez, Andres Guardado and Javier 'Chicharito' Hernandez sent them through to face Netherlands, despite Ivan Perisic's late strike.
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"Congratulations to Mexico, for 50 minutes they were better team. That is football: when it comes to equal teams, little details decide it. This time those details were two dead-ball situations," he told HTV.
"With [Danijel] Pranjic in the middle I wanted to block our left side and let [Ivica] Olic be more offensive in a 4-1-4-1 formation. We managed to block Mexico on our left but up front it was not good enough.
"That is why I have put Pranjic back on the left and included [Mateo] Kovacic on the pitch. That didn't work, we soon conceded a goal and then when the play opened Mexico showed how dangerous they are.
"Mexico gave us a lot of respect, they didn't play with pressing as usual because they knew about our counter-attacks. In the second half maybe we were physically down, and Mexico were better. We gave some joy to the Croatian people, especially after first two matches, but today the opponent was better."
Mexico go through in second place in Group A behind Brazil, who beat Cameroon 4-1 in Brasilia to set up a last-16 clash with Chile.