Vettel came second in the 2017 F1 Drivers’ Championship to Hamilton.
Ferrari also lost out on the Constructors’ title to Mercedes.
Vettel led the championship at the halfway stage but fell away following a series of crippling setbacks during the Asia fly-aways, enabling Hamilton to claim a fourth title with two races to spare.
“Lewis probably made fewer mistakes and the best man won in the end,” said Vettel after Abu Dhabi GP. “He deserved to win
But with the final standings not necessarily offering an accurate reflection of how close the battle was between the two four-time champions and their respective teams, Vettel is confident Ferrari can take another leap forward next year.
Ferrari were still deemed to have had a successful season and are tipped to rival Mercedes for the championship in 2018.
And four-time title holder Vettel reckons his team are in the right place to surpass the Silver Arrows.
“Obviously we had two or three races that turned out to be very costly for different reasons and Mercedes have been very, very strong and consistent all year,” Vettel said.
“In the end we weren’t good enough to take it to the last race and take the championship.
“I think we know what we need to do.
“There are lessons that were obvious, some were a bit more hidden but I’m sure we’ll dig deep enough and try to find all of them.
“If you look where we were in 2016, I think we did the biggest step out of all and from winter testing we were right there.
“Historically we lost out as the season progressed but this year we still had so much potential, so many big steps, but we managed to do them and stay in the fight.”
Vettel will race alongside Kimi Raikkonen again next year, with Hamilton partnered by Valtteri Bottas.
Red Bull are also expected to eat into Mercedes’ advantage after a strong end of the season.
Acknowledging that catching Mercedes in 2018 will “be massively tough,” Vettel admitted: “The final step is always the hardest.”
Vettel, 30, has been asked in recent weeks if he has any plans to retire soon.
Speaking to Spanish newspaper AS, he said: “There is no concrete answer.
“The moment in which I no longer have fun (is when I will leave).
“That’s because there are many drivers who would still be having fun and would need a seat.”
Vettel has claimed five victories this season, as many as Ferrari won in the previous five seasons combined, underlining the size of the step forward the Scuderia have made this year. So can they repeat the trick this winter again?
“The team is ready and fired up,” said Vettel. “We have good projects in the pipeline. Some will take time, some will be quite soon.”