The 1-0 reverse at Carrow Road has left Spurs six points behind fourth-placed Liverpool in the battle for a place in Europe's elite competition.
The loss came just three days after a 1-0 defeat against Dnipro in their Europa League last-16 tie but Sherwood is hopeful of an upturn in fortunes, starting with Thursday's return leg against the Ukrainians.
"Good players and good teams come back when they're down and that's what we've got to do straight away," Sherwood told Spurs TV.
"We certainly need to have character now to play in front of our home fans after the disappointment of losing to a team around the bottom of the league.
"That happens, what can you do? You can't crawl into a corner and hide. You have to confront it and have a go."
The character of Sherwood's side will be fully tested in the coming weeks as they face three of the top four teams before the end of March.
This Sunday sees them entertain Cardiff before embarking on a derby double-header against Chelsea at Stamford Bridge and a home clash against Arsenal.
Southampton are next to visit the Lane on Sunday, March 23, seven days before Sherwood takes his charges to Anfield for a proverbial six-pointer against Liverpool.