Ten-time European Cup winners Real were beaten in the first leg of their quarter-final tie in Germany after conceding twice in the first half.
Ricardo Rodriguez's penalty gave the hosts an advantage that was added to by Maximilian Arnold's close-range finish.
"We just weren't good enough. It happens in football," Bale said.
"It happens all the time. We need to make sure come the second leg that we're on it and win by three goals.
"Obviously we expected to win the game but things like this can happen in football.
"We know it wasn't a great performance tonight but we know it's only halfway through and we've got time to put it right."
Bale believed he he should have been awarded a penalty in the first half, as well as ruing the failure to award an early strike from Cristiano Ronaldo that was ruled out for offside.
"I've been told it wasn't offside so there's that and right at the start of the game I've had a clear penalty on me that wasn't given," Bale added.
"Things haven't gone for us tonight but, no excuses, we weren't good enough tonight. We have another game to put it right."
Madrid and Wolfsburg meet for the second leg of their quarter-final on Tuesday, 12 April.
This result for Zinedine Zidane's men came just four days after they had won at the Nou Camp with 10 men, yet Bale denied that result had affected their performance in Germany.
"We've had time to recover," the Welshman added.
Gareth Bale insists Real Madrid can still reach the last four of the Champions League despite their damaging 2-0 defeat at Wolfsburg.