Both teams finished with 10 men after the game was marred late on when former Seasider DJ Campbell and Jack Robinson both saw red after a melee in the box involving all the outfield players.
Tom Ince's early penalty was cancelled out by Jordan Rhodes' own spot-kick before Dan Gosling's long-range effort gave Blackpool a first-half lead.
And Blackburn drew level in injury time when Tom Cairney's right-wing free-kick went in off the head of Blackpool's Davies in a crowded penalty area.
Rae said: "We're obviously extremely disappointed to lose the goal in the last minute as we had the game under control and restricted them to long-throws into the box.
"Overall we were probably well worth the three points - early on Tom (Ince) was creating a lot of problems. We pride ourselves on our defensive duties and we've conceded from two set-plays.
"It's a local derby and we started really bright. Unfortunately we couldn't capitalise on it and we allowed them to get back into it.
"But these boys will learn from that and they're all really disappointed which is a good yardstick for us of how far the club has come.
"My initial reaction was it was a dangerous tackle from DJ (Campbell) and he went in two-footed and it was dangerous.
"It without a doubt felt like a loss - I'm frustrated and it's always a sore one to concede an own goal."
The Seasiders took a deserved lead when Ricardo Fuller was pulled down in the box by Matt Kilgallon and Ince stepped up to coolly slot away a 13th-minute penalty.
But Rovers drew level through top scorer Rhodes with a penalty of their own on 21 minutes, coolly finishing after Robinson's handball.
Against the run of play, Gosling handed the Tangerines back the lead when his 25-yard 39th-minute effort found a way past Jake Kean into the bottom corner, before the late own-goal equaliser.
The game erupted in the 83rd minute when Campbell went in heavily on goalkeeper Matt Gilks which prompted a melee involving most of the players with the former Blackpool player given his marching orders along with Robinson for his reaction.
"It had everything," said Blackburn manager Gary Bowyer. "I think in the end we're going away with a point we thoroughly deserved.
"Their second goal surprised and it's not a fluke as he meant to shoot. Full credit to our lads as at half-time we had some choice words about upping the tempo and we did.
"You have to give them credit for how they responded - it's a bit of luck for the own goal but over the course of the game, it's a bit of luck we deserved.
"I think Ricardo Fuller had more of Matt Kilgallon than Matt had him if you watch it again.
"DJ was entitled to go for it but it's the reaction of the Blackpool players after that caused two players to be dismissed from the field.
"Gilks and DJ are mates so DJ is not going to hurt one of his mates - it's the reaction afterwards.
"The confidence is there the way the players are going about it with the ball. It gives us a boost psychologically and it buoys us."