The Azzurri went into the encounter in Naples with no pressure having already qualified for the World Cup finals last month.
Prandelli had nevertheless demanded a strong finish from his players but the Italians had to twice come from behind to earn a point against Armenia in their last Group B qualifier.
Mario Balotelli's late equaliser allowed Italy to end the qualifying campaign unbeaten.
"We had a terrible start," Prandelli told Italian TV station Rai. "Our opening 20 minutes were embarrassing.
"We then reacted and had spells where we played well but in the second half we gave away a goal from a corner."
The result followed Friday's 2-2 draw at Denmark, where Alberto Aquilani's last-gasp equaliser prevented Italy from suffering a first defeat in qualifying.
"I had asked my players to play good football and they didn't do that," Prandelli said. "The important thing for me was to see that the players didn't give up.
"It's obvious that when you arrive at the last few games having already achieved your aim, you do enough just to take home a result.
"But that shouldn't be the case, we should have shown more intensity and determination, otherwise you pay.
"I now need to judge their performances because this is football and after this game, I will have to evaluate them in view of the 23 players that will go to Brazil."
Tuesday's outcome means Italy finish the qualifiers at the top of Group B with 22 points, six points above their nearest rivals Denmark.
The Azzurri, who have won six of their 10 games, may miss out on being a top seed in the 2014 World Cup draw.
However, Prandelli, whose side finished runners-up to Spain at Euro 2012, said: "We were not a top seed at the European Championship and for that reason I'm not worried."