Frank de Boer's team won with a Lasse Schone goal, but Lennon says Celtic were far from their best at the Amsterdam ArenA and believes that the result makes it "difficult" for Celtic to advance from the group.
"I thought we were very disappointing in the first half, but better in the second half," he told reporters.
"We made opportunities to score goals but didn't take them. Some players will have regrets about the game. Some players weren't at their best and at this level you can't do that.
"It makes it very difficult but the whole thing could flip around again if we beat Milan. But we have to play better, particularly on the evidence of the first half."
Celtic's next group match is at home to AC Milan.