The Swedish club fell to goals to Koke and Raul Garcia at the Swedbank Stadion, leaving them with just three points from four Group A games - putting their fate in other results.
Despite not having scored in any of their three losses in Europe, Hareide said they were not disgraced by the La Liga champions on Tuesday.
"We played well and that's why we're disappointed not to get anything from the game," Hareide told UEFA.com.
"We played a really good second half with a couple of good chances. It's like that in football.
"At this level we have to be perfect both offensively and defensively. Hopefully we will learn something, but of course when we have more possession than Atletico then we are on the right track."
Hareide said he empowered his men to protect their home field, before they fell to last season's European finalists.
"We said beforehand that we should play on the edge, regarding both our attitude and our tackles. We wanted to show that this is our castle. We had to pay respect to Atletico but we also wanted to show that we can play football," he continued.
"We now have to win the next game and hope Olympiacos lose in Madrid.
"But of course the last game [against Olympiacos] will be difficult, not least due to our away form.
"I am very happy about our performance today and we showed a lot of energy. We have to do that in the rest of the matches as well."
Malmo defender Anton Tinnerholm claimed his side had more chances than Diego Simeone's men, and said they put in a conscious performance after half-time to improve from their embarrassing 5-0 loss to Atletico in Spain.
"We worked like a team, we had chances to score but the ball didn't go in. They had fewer chances than us but they scored. Sometimes football is simple - they scored and we didn't," Tinnerholm said.
"It felt like I had more chances than the whole Atletico Madrid team. But I couldn't force the ball into the net. The first was the closest one, I think a defender saved it on the goal line. The second one, the goalkeeper took it and the third went just over the crossbar.
"We weren't happy with the second half over in Madrid. Today we worked like a team, we put in a great performance but it's not enough."
