Hamilton this week started in earnest a three-year deal with Mercedes who are paying the Briton, who turns 28 on Monday, £15million per season.
The surprise switch announced at the end of September brought to an end Hamilton's 14-year association with McLaren, the final six of which were spent competing in Formula One.
McLaren team principal Martin Whitmarsh long maintained Hamilton was offered a salary he believes would have made him the highest-paid driver on the grid.
Dennis, now executive chairman of the McLaren Group and McLaren Automotive, concedes more could have been done "in both directions".
Speaking to CBI magazine Business Voice, Dennis said: "I think it's wrong to portray that Lewis left this team.
"At the end of the day you end up with a situation where you're going to separate if the circumstances aren't right.
"Life isn't about one person deciding anything. It's never that way. It's about circumstances.
"Everybody says 'Am I bitterly this or bitterly that?' What? I'm a realist.
"Did we have the ability to create a situation where we could have stayed together? Categorically, yes. Would that have been the right thing to do? We didn't think so."
There were rumours Dennis fell out with Hamilton over the contract saga, but the former maintains there is no ill will towards to the latter.
"Whatever people choose to do at the end of a contractual period, the professional thing to do is to be supportive of the other side," added Dennis.
"We don't wish him every success at Mercedes - that's understandable, as he's obviously going to be a competitor - but we don't wish him anything negative."