Lloris required lengthy treatment after colliding with Everton striker Romelu Lukaku during the second half of the Barclays Premier League clash at Goodison Park.
Substitute Brad Friedel looked ready to come on as Lloris was eventually led off the field but the Frenchman appeared to argue for the right to play on.
After further debate, Villas-Boas elected not to make a change and Lloris vindicated his decision by making a good late save from Gerard Deulofeu.
Villas-Boas said: "Hugo still doesn't recall everything about the incident.
"It was a very difficult moment for us and I am happy he is well.
"I made the call to keep him on the pitch because of the signs he was giving.
"He was determined to continue and looked concentrated, driven and focused enough for me not to make the call to replace him.
"The saves he did after the incident proved that right."
Lloris, 26, bravely dived at the feet of Lukaku as he chased a long ball from Gareth Barry.
His head banged into the leg of Lukaku in what appeared an accidental collision and his subsequent treatment was the chief reason for the game's nine minutes of injury time.
Everton boss Roberto Martinez was relieved Lloris did not appear seriously injured but was irritated that Friend booked Lukaku for his involvement.
Martinez said: "We were glad to see Hugo Lloris back on his feet.
"It was a strong incident, nothing malicious, two brave players fighting for the ball.
"Romelu did nothing wrong and he picked up a strong knock on his thigh and he had to come off as a consequence.
"I was really disappointed to see Romelu punished with a yellow card in what was an honest challenge, both players trying to get the ball."