The Celtic manager was disappointed by what he described as a ‘flat’ performance from his team as they lost 2-1 to their Old Firm rivals and saw their lead at the top of the table cut to two points.
Rangers also have a game in hand and Lennon recognises that the Ibrox side will be galvanised by a first win at Celtic Park since 2010.
“It just means that it’s game on,” said Lennon. “It could have been an eight-point cushion or a five-point cushion today.
"Now it’s a two-point cushion and if Rangers win their game in hand they’ll have a one-point cushion, so there is nothing in it.
“I’m sure that’s given them a shot in the arm. But we are not prepared to give up anything. And we won’t.
“We have to play better. We have to play stronger. We have to be more physical. I felt we were not reacting quickly enough to things today.
"In the throes of the game they were a little bit better than us today.”
Lennon dismissed any suggestion of fatigue as a reason for his team’s performance in what was their ninth game in December.'No fluidity'
“I don’t think it was one game too many,” he added. “Before the game we looked okay physically. But it was actually in the game itself we were standing off things too much. I wouldn’t say we were not competing because we competed okay.
“But there was no fluidity to our game at times and we were passing the buck a little bit as well which is not like us to be fair. But it’s a test of our character now which is good. We need to reset and get a rest which is well deserved.
“It’s not the time to be over critical or anything like that . We have lost a game but there is still plenty to play for. We have time to think on and consider it.
“I can’t put my finger on what was wrong today. We didn’t turn them enough, we kept trying to play in front of them when we should have gone down the sides.
“For the first 15 minutes we were playing in our own half and you can’t do that in a derby. So we need to look at that and change it.
“I’m disappointed at the end because we had some set plays in good positions but we let the emotion of the game get the better of is. We should show more experience than that and not panic, just stick to what we know.
“If you keep playing the same way and it’s not working then you have to change it. And you have to work harder off the ball as well in these games.
“We’re just off the back of winning 11 or 12 games in a row so it’s not the mentality that worried me today. It was the lack of physicality and being a little stand-offish.
“So they’ve got to get really hungry now. They’ve got to hold on to how they feel at the minute and use that as a motivation going forward.”