Having lost their Nations League opener 2-1 against World Cup winners France, Koeman's men will hope for a better result when they host Germany on Saturday in League A Group 1.
And Koeman feels his team should note the success Dutch club Ajax had away to Bayern in the Champions League last week, earning a 1-1 draw at the Allianz Arena.
"We have to respect the opponents but we also have to believe in ourselves," Koeman said.
"We are not so bad and the others aren't so good.
"We have to believe in our qualities, just like Ajax in the Champions League against Bayern.
"If you have the feeling you can compete with them slowly the confidence grows. The Dutch national team is in the same process right now."
Netherlands have won two, drawn two and lost two of Koeman's six matches in charge since taking over in February, but the former Everton manager accepts his side remain in transition after their failure to qualify for Russia 2018.
"The players thought it was a bad World Cup qualifying campaign as well. They needed to make some changes," Koeman added.
"There were also players not selected while others thought they should have join the squad. At this time we're also making changes. We're recovering now.
"In my opinion, it's not a great period for the national team. We're used to fighting for trophies. On the other hand, we still have players who play for big clubs.
"We have enough quality but it's not going to be an easy win for us against Germany. We have to play at our best against them, but I also think that Germany have known better times in football."