Pellegrini concedes his side were well below their best in Tuesday night's first leg of their last-16 tie.
A second-half Joao Moutinho goal earned Porto a narrow win at the Estadio do Dragao in a match which the Portuguese giants bossed for large parts but without being able to create too many clearcut chances.
However, whereas Porto struggled to turn possession into opportunities, Malaga barely registered as an attacking force at all as the Champions League debutants suffered their first defeat in the competition.
Pellegrini said: "We're not particularly pleased with our performance, as we didn't play well at all, particularly on the attack.
"Porto kept the pressure on us and prevented us keeping hold of the ball throughout the 90 minutes, although we weren't clear about our game either. Porto played well, but it wasn't our night at all."
Nevertheless, the former Real Madrid boss is optimistic about next month's second leg - if Malaga can get more of the ball.
He also felt Moutinho's goal should have been ruled out.
"Despite Porto's dominance of the match, they didn't really cause a lot of trouble for Willy Caballero, and I think that their goal was actually offside," Pellegrini added.
"If we return to our usual style of play, I think we can turn things around at home.
"By improving our control and possession of the ball, it's perfectly feasible that we can return to winning ways at home."
Porto coach Vitor Pereira felt his side deserved a bigger lead to take to La Rosaleda.
He said: "We fulfilled our objective of winning this match, and even though we could have scored more goals, I think a 2-0 win would have been a more accurate result.
"They defended well however, although their attacking display wasn't as strong as in other matches.
"They didn't create many chances to score, but we're expecting a difficult return leg in Malaga. We believe we're capable of qualifying, though."