Blues failed to make it through to the npower Championship play-off final after a 2-2 draw at St Andrews - the Seasiders winning 3-2 on aggregate to set up a final meeting with West Ham at Wembley on May 19th.
"It's been a really tough day for us," the Blues boss told Sky Sports after the game.
"We came into tonight's game with a real chance and I've walked away from a devastated changing room. We all feel that way.
"It's been a real long, tough season for us and with that comes a lot of ups and downs and lot of emotion.
"We have got a lot of people, players and staff, who have spent a lot of time together this season and that makes it even tougher.
"We have to congratulate Blackpool on their victory over two games and I'm sure it will be an exciting final."
Blues fans chanted Hughton's name at the end of the game conscious of the fact that he could depart St Andrews in the close season.
"It made me feel good. They have been super all season," he said.
"We have allowed them to travel long and far to see us play, they have had plenty of games and they have had to spend an awful lot of money. Everything that they have given us, we are so appreciative of.
"They have supported myself, the staff and the team extremely well."