"In the first half I thought we battled and scrapped well and gave ourselves a platform to go on and get something," Keegan said.
"It was always going to be tough here and in the end I think Newcastle desrved to win but I don't think it was a 3-0 contest. There was a period when the game was up for grabs and I think the first goal was vital.
"We played better than we did against Leicester but we still got beat 3-0," he added. "We didn't create enough if we are honest.
"The attitude and approach of the players was good but the result was disappointing and they are the two sides of the coin in football."
The former Newcastle boss picked out two of his men for special praise.
"I thought Trevor Sinclair and Joey Barton really worked hard for the team at St James's, along with several other players. There was nothing here for us and that is disappointing," said Keegan.
"Coming to Newcastle and battling and scrapping and getting beaten is not a footballing disaster. Losing at home to teams like Leicester and going to Wolves and playing like we did is why we are not in the top four."
The City boss also said: "I don't think we are quite good enough to go top four at the moment but when we get everyone fit and free from suspension, we will see."