After a sterile first half, Mauricio Taricco opened the scoring with his first goal for the club just two minutes after the break.
But two mistakes handed clinical Liverpool the initiative at 2-1 and it was 3-1 before Teddy Sheringham's late reply.
"My thoughts are of total frustration and disappointment," conceded Glenn afterwards. "We found ourselves 1-0 up and should have been in the driving seat.
"From there is where the performance needs to be looked at because we gave two goals away, both blatant mistakes on our behalf and we handed the game back to them on a plate.
"I thought we were the better side in the first half and it could have been such a different story.
"I said to the lads that we couldn't have asked for more effort, more guile, we created enough in the first half and were inches away from putting the ball in the back of the net.
"So we take heart out of the performance but it was so, so disappointing to get into the driving seat and then give the game away."
Glenn Hoddle had few complaints with Sunday's performance against Liverpool but admitted his frustration at the way we handed the Reds a way back into the game as we slipped to a 3-2 defeat.