It was the Norwegian's first home game in charge and Ruben Rochina gave Blackburn a deserved early lead after 13 minutes with a coolly taken penalty after Mauro Formica was fouled.
But Birmingham hit back almost instantly when Marlon King pounced after a Nikola Zigic shot hit a post to notch his second goal in as many games.
Berg thought was in good spirits after a stirring performance from his side, who have won just two of their last 10 games and he said he was moved by the welcome he received.
Berg said: "I was really happy with the welcome and as soon as the game starts you focus on the game.
"But you can hear the fans and it's good to hear them get behind the team and that is encouraging for the team, that is what we need and it is a shame we couldn't give them the result they would have liked.
"I thought we deserved to win. We were at times excellent, at times OK.
"At times could be better but we are looking to extend those good periods even longer but at our best we caused them lots of problems."