Blues were beaten 1-0 by the Seasiders in the first leg at Bloomfield Road on Friday evening and the Blues boss admitted that Ian Holloways side fully deserved victory.
"I thought that Blackpool were good on the ball, which you very much expect here," Hughton said after the game.
"You know that they're going to have good possession of the football and I thought that we had really good spells where we kept our shape and defended well.
"But we need to be better on the ball than we were.
"They had a couple of good chances, we had arguably the best chance of the game through Marlon King right at the death and it's a very fortuitous goal that settles it. The shot was going wide and takes a wicked deflection and that's the nature of the game.
"They were better than us, we'll hold our hand up. We'll need to be better than we were tonight and if we are that puts us in with a great chance."