Director of cricket Ashley Giles said Warwickshire could have done no more to try and win the County Championship.
Giles told BBC Coventry & Warwickshire: "It is hard to take because the lads gave it everything.
"I thought it would be hard work but I thought we were going to get over the line but we've not quite managed it."
He added: "If anything, in the end, we've been beaten by the wicket - it was too flat and there was nothing in it for the quicker bowlers."
Warwickshire began the final round of games top of the table and looked firm favourites to win the Championship at the start of a final day, which began with the Bears needing seven wickets to beat Hampshire, who were still 126 runs behind after being asked to follow on.
Giles said: "I am hurting inside, and I'm sure they are [the players] as well.
"We've been through a tough year but we have played some really good cricket in the Championship this summer and we have got to build on that.
"We put 493 on the board and needed seven wickets, 120-odd ahead, on the final day of the season to win the Championship, and if someone had offered us that at the start of the season we would have taken it."
The Bears only avoided relegation at the end of last season after beating Hampshire, and despite missing out on the title this time around, Giles is pleased with the progress that is being made at Edgbaston.
"It would have been great to sit back and say we were top on the last day of the season, but second isn't bad," he added.
"We are going in the right way. We won the second XI championship and we've come second in the County Championship, so it's not been a bad year.
"There is also a lot room for growth with the players we have got and that's the pleasing thing about this squad."