England defied expectations to reach the semi-finals of Russia 2018, where they lost to Croatia, but could not end the tournament on a high note as the Red Devils ran out 2-0 winners in St Petersburg.
Thomas Meunier opened the scoring for Roberto Martinez's side on four minutes and a lethargic English outfit could not muster a response before Eden Hazard made sure of victory eight minutes from time.
"Belgium are a better side than us," Southgate told ITV Sport. "We had to play flat out. We had a day less to repair and recover. It was a game too far for us.
"Belgium are a top team and they will be thinking they should have gone further than they did. We caused them problems and pinned them back but they have players of the highest quality.
"Two years on, you look at the number of caps and age of squad for Belgium. This is their peak but we are nowhere near that and we knew that the whole way through."
The result sees England equal their second-best World Cup finish, the Three Lions also finishing fourth at Italia '90.