A 1-1 draw in Podgorica has left the Three Lions playing catch-up in Group H, with Montenegro holding a two-point lead at the summit.
Damjanovic is confident that advantage can be maintained and a major upset on the road to Brazil 2014 can be secured.
He believes England have wasted their opportunity to steal a march on their rivals, with Roy Hodgson's side accused of 'hiding' when the pressure was on.
Damjanovic said: "I didn't expect that they would play that badly. They were so afraid and just sat back.
"Nobody wanted to take the ball except (Wayne) Rooney. They were hiding and that really surprised me.
"In the second half, we could have easily scored one or two more goals.
"Everyone in the squad now believes we can finish top and qualify for Rio automatically."