Tries from Will Greenwood, Ryan Jones and Shane Williams ensured a fantastic win in Carisbrook.
"The momentum is building. I can smell something special is happening with this group of people," he told Sky Sports.
"It's a great changing room to be in. It was a very good Otago team but they stuck together very well. It was a great win, I'm very pleased."
The Lions fielded a much-changed side than the one which accounted for Wellington in midweek, but several players made their cases for Test selection.
"I'm not confused, I'm very clear about how people are playing, there were some top individuals," Woodward added.
"It's not a Test team, I'm looking at 22 players."
Woodward, who won the World Cup with England in 2003, was particularly impressed with late replacement Jones.
"I thought there was some wonderful team performances but some top individual performances, Ryan Jones was just outstanding," Woodward said.
"To see him play was wonderful because he has only been here for 10 days, he had a fantastic game.
"Shane Williams got a bit of ball on the front foot - whereas against Maori he was on the back foot.
"The Test match is looming large now and we're getting very excited about this, it's great to be here."
Woodward singled out the contribution of Wales' players, adding: "I can say categorically now that Wales winning the Grand Slam was totally deserved.
"These guys, to a man, are something very special. The way they operate behind the scenes and the way they talk, they are just fantastic.
"There has been lots of rubbish written about Welsh players not being good tourists, on this trip it's the opposite. These players are almost the heart-throb of the team.
"They've been fantastic and it's been a pleasure working with them."