O'Connell watched on helplessly as Ireland came within a whisker of securing a first win over New Zealand in the second Test and then crashed to their heaviest defeat in the third.
But the Munster second-row reckons there are plenty of positives to build upon and that Ireland are edging closer to securing the historic victory.
"Obviously, the second Test was very disappointing because I think we were good enough to win it," said O'Connell.
"The penalty decision at that scrum was very frustrating. Maybe we did infringe the scrum but I don't think it was a big enough infringement to decide the game. It gave them a massive lift.
"But I thought we played great and I think we will beat them.
"If anything, I wanted to be there more for the third Test. You feel you've let them down by not being there. I've been in dressing rooms like that before and I'd say they were in a fairly tough place. Even though you don't see it at the time, a lot of good things can come from bad days like that.
"We're getting stronger and stronger in Ireland. The provinces are driving each other on to higher and higher levels and that's going to help the national team.
"We need to keep playing these teams. It's one of the things Clive Woodward did when he was with England, he played the Southern Hemisphere countries as often as they could and it's going to be great for Argentina to be in with them from now on."
Having missed out on the summer tour, O'Connell was able to return to pre-season training much earlier than in previous years.
He is aiming to be fit for Munster's pre-season friendlies but is still recovering from the medial knee ligament problem.
"I thought I'd be further down the track by now," added O'Connell, who has played 11 times for the Lions.
"When I didn't go to New Zealand, I said I'd definitely be back fully fit for pre-season, but I wasn't. I'm back doing running and will be fully back into it next week although I haven't done the hard work and slog like some of the boys."