The South Americans' 1-0 victory over the Azzurri was overshadowed by allegations that Suarez had bitten the defender and left physical evidence on Chiellini's upper body.
Although Prandelli admits that he did not see the incident, the coach - who resigned shortly after the result - confirms that he saw the proof after the game.
"I didn't see Suarez biting him but I saw the bite-marks on his shoulder but the referee's assistants were so busy they didn't see anything," he told reporters.
"It's a shame, it's a real shame that it turned out like this."
Moments after the incident, Diego Godin headed an 81st-minute winner which took Uruguay into the last 16 at the expense of Italy.