Solskjaer rattled off a streak of 11 unbeaten matches to start his Red Devils tenure before suffering a 2-0 reversal against PSG in Tuesday's clash at Old Trafford.
With Neymar and Edinson Cavani headlining those absent from the PSG team, Solskjaer and Manchester United have been criticized in the aftermath for their inability to put together a performance at home.
Giggs, meanwhile, doesn't see it that way as he backed the former Red Devils striker despite the recent defeat.
"Manchester United have been brilliant since Ole took over but we all knew what United are, they were in a false position in the league before he took over but they're still a few players short of challenging in the Champions League year after year," Giggs said in his Class of 92 Diary on Sky Sports.
"But the signs have been promising so it's just a case of not getting too cocky when United were winning, but not getting too downhearted after losing to PSG. They had to lose at some point!
"But they're good games to have after a defeat as you don't need any help to get the players up for them."
Manchester United will be without Jesse Lingard and Anthony Martial for upcoming clashes against Chelsea and Liverpool as the pair have been diagnosed with injuries that will keep them out two-to-three weeks.
As things stand, the Red Devils sit fourth in the Premier League following a run of form in the league that has produced eights wins and one draw from nine matches.
They sit one point above fifth-place Arsenal and sixth-place Chelsea, while Tottenham are nine points clear of Solskjaer's side in third spot.
Following an FA Cup meeting with Chelsea on Monday and a league match against Liverpool, Manchester United will face Crystal Palace and Southampton before heading to Paris for their second leg against PSG.