The Italians went into the game in Germany knowing that a point would have seen them through to the knock-out round of the Champions League.
However, the defeat means Napoli have now dropped to third in Group F, level on nine points with second-placed Dortmund with one game remaining.
Despite the loss, Benitez felt his side put on a good showing against last season's runners-up, saying to ssscnapoli.it: "We played a great game and produced an important performance against one of the strongest teams in the world.
"The team showed a lot of character and played at a high level against a very strong rival.
"Borussia have played under the same coach for six years and they have a solid group that last season came closing to winning the Champions League.
"For us, there are many positives to take from this game as my players showed grit, character and never gave up."
Benitez admitted giving away a penalty in the 10th minute, which Marco Reus converted to put Dortmund ahead, cost his side dearly.
"We showed the right mentality," Benitez said. "If we hadn't given away the penalty, it would have been a different game."
Napoli still have a chance of going through but need results to go their way in the final round, where the Italians host Group F leaders Arsenal while Dortmund go to a Marseille side who have lost all five of their matches.
"We have to think positively," Benitez said. "We will show our full potential in the future by working hard and following our technical plan."