Albion's 2013/14 Premier League campaign finished with them having slumped to 17th place in the table, just three points clear of the relegation zone - a year after achieving a record-high final position of eighth.
The club parted company with their head coach Pepe Mel, who was brought in as a replacement for the sacked Steve Clarke in January, by mutual consent last week.
They are still searching for a new head coach, with Russell Slade, David Moyes, Chris Hughton and Malky Mackay all having been linked with the Albion hot-seat since Mel's departure.
In a statement published on West Brom's official website on Friday, Peace - chairman at The Hawthorns since 2002 - said: "For a club of our resources, it was always going to be difficult to repeat our highest Premier League finish of eighth in the previous season.
"However, it was not the campaign we hoped for or expected and, as chairman of the football club, the buck stops with me."
Albion were full of optimism ahead of last season after signing strikers Victor Anichebe and Stephane Sessegnon and recruiting midfielder Morgan Amalfitano on a season-long loan deal.
Amalfitano was a success but Albion missed the goals and pace of on-loan Chelsea striker Romelu Lukaku, who signed for Everton on loan after a hugely successful spell at The Hawthorns.
Peace, who has appointed Terry Burton as technical director, emphasised Albion are particularly focusing on their recruitment policy ahead of this summer's transfer business.
He added: "The squad we assembled during the summer transfer window - regarded in some outside quarters at the time as our strongest for more than three decades - has not performed as consistently or as well as we would have hoped.
"We have been taking a long, hard look as to why this has proved to be the case, especially in terms of our player recruitment.
"Of course, there is often a thin line between success and failure and some of the fine margins that appeared to go our way in previous campaigns did not this time around.
"The Financial Fair Play rules mean there is now very little to choose between the teams below the top six whilst the influx of money from the new media rights deal has resulted in the league becoming more competitive than ever.
"We recorded far too many draws and a run of key match decisions going against us during the season, which never seemed to even out, did not help.
"However, these are only contributory factors to, and not excuses for, the fact we finished 17th.
"With our search for a new head coach now under way, we've been addressing the areas within the club that need strengthening."
He added: "With what is at stake, this has undoubtedly been the toughest season I can remember.
"But the most important thing is that we can attempt to correct the mistakes that have been made whilst still a top-flight club.
"For a club of our size, this has, and always will be, our number one objective and we hope that we can achieve this in a less fraught manner in future seasons.
"Terry (Burton, who is coming in as technical director on June 1) will provide more footballing knowledge and experience at the highest level of the club.
"The structure we have had in place for the past six or so years has generally worked well and been a key factor in the club returning to the Premier League and staying there. We are certainly not going to rip it up and start from scratch after one poor season.
"However, there is no doubt that the structure needs strengthening and this process is underway.
"Although we have signed several talented players over the past few years, we have always sought to improve our recruitment methodology and last season has underlined the strides we still need to make.
"We are also endeavouring to put more processes in place that de-risk the signing of new players.
"We continue to run the club on a proven business model and that will not change.
"But we face another big summer. Decisions that are made over the next few months will have a huge impact on our fortunes next season.
"I recognise the frustration many of our supporters have been feeling this season. I would like to thank them personally for the way they rallied behind the team, especially in the closing weeks of the season, which proved pivotal in getting the club over the line."