The hosts were humbled 7-1 in Belo Horizonte by Germany on Tuesday, conceding five goals in a disastrous opening 30 minutes.
Speaking to beIN Sports about Brazil's tactical approach, Wenger said: "It was absolutely horrendous. Of course, it would be too easy for me to point the finger at [Luiz Felipe Scolari].
"I have been a coach long enough now to see these things happen to me and sometimes your team confidence can just go completely but I am a long-term admirer of Brazil on the football front.
"In the end I think you've got to give the credit to the German team though because I sat there and just saw them handle all the pressure, creating wave after wave of attack even though they were playing the most famous footballing nation in the world on their home turf."
Brazil will look to end the tournament on a high when they contest for third place against Netherlands later this evening.