The manager has come in for criticism in some quarters for fielding a below strength side for the game against the Baggies, but he still insists that he made the right decision in resting Alan Shearer.
"It was a terrific blow. Everybody that I know connected with the club was not just disappointed but quite devastated,” he said.
"We need to get our heads back on our shoulders because there's a match on Saturday and we know how much it means to us.
"We've been going very well. We'd had a run of five victories - that would have been six in succession.
"The team played very good football - some of our football was outstanding - the only part of our game that was missing was getting the ball past the goalkeeper. That's the only thing.
"It's like a golfer. He gets on in two and then takes four putts, so he has a six. Part of playing golf well is sinking your putts; part of playing football well is taking your chances, so that was the only thing that let us down.
"We had a phenomenal crowd. It's a special place this is, it's a special city, it's a special football club when you see that.
"But I can promise every single supporter that if they had been in our dressing room after the game, as I was with the players, they would have understood how our players felt - not how they felt, how our players felt - because they were very low and sat there speechless, motionless, dead, having given everything.
"It's sad, but it's football - you win, you win, you win, you win, you win, and there comes a day when you don't win.
"You will lose because nobody wins every game. I've yet to see a team who wins every game, and it so happens that one we didn't think we'd lose, we did. End of story, it does happen."
Of the Villa game, he added: "It won't be easy because they're below us. It's a big club - it's the biggest club in the Midlands, basically.
"I lived there and worked there for six years in that area, so I know the club and they won't want to be snatched into a relegation battle. We've been there, we know what it's like and they won't want to be there.
"They'll come here, they'll say 'Birmingham City beat them, West Bromwich Albion beat them and we're bigger than those two, so we'll beat them'.
"We've just got to understand that and go out and fight again. It's another battle."