The Reds were soundly beaten at Artemio Franchi as teenager Stevan Jovetic scored both goals in the first half of the Group E encounter.
Benitez's team, who won the competition in 2005, improved after half-time, with Lucas Leiva wasting a glorious headed opportunity, but there was no way back.
The former Valencia boss confessed that his team were second-best in every area of the pitch in Florence.
Benitez told Sky Sports: "We were giving the ball away, they were regaining and playing counter-attacks.
"We were not winning any second ball or challenges.
Carragher frustration"In the second half we had chances at the start. You can see the difference in football if you take your chances, like they did in the first half.
He added: "We were disappointed, everyone was disappointed. You cannot play at this level because it is the Champions League and you know the other team is good.
Benitez did not want to blame the defeat on the absence of injured midfielder Javier Mascherano.
The Spaniard said: "We had too many problems, not just one player. We were not the best in any part of the pitch.
"If we had scored in the first minute, it would have been completely different with the way we were playing. Again, in football, if you want to win, you have to score.
He added: "I was really disappointed because we were talking a few days before.
Bounce back"We knew that they were a good team and were organised and played good counter-attacks.
"We were giving the ball away all the time and giving them good chances to go behind our defenders."
Defender Jamie Carragher admitted the Reds were well beaten by Fiorentina, but is confident of bouncing back.
He said: "We didn't perform well enough, we know that. We were slightly better second half, but still not good enough."
Carragher added: "Nothing went to plan. It was a massive game for them, and a massive game for us, but they seemed to be more ready for it from the start, for whatever reason.
"It is something we have got to sort out but fortunately in the Champions League we have still got four games to put that right."