"We need to refresh the team," Santos told a news conference on Wednesday. He said he planned to make two or three changes but declined to give details.
Group favourites Portugal had taken the lead against Iceland in St Etienne on Tuesday before a second-half equaliser from Birkir Bjarnason came against the run of play.
"It was disappointing but we are not going to lose hope because we were never euphoric," Santos said. "I admit that this was not what we expected but we need to move forward."
The coach said he was confident about the match against Austria, who lost their opener 2-0 to Hungary.
"We are going to play an excellent game against Austria and we are going to win," Santos said.
Cristiano Ronaldo, who won his 127th cap and equalled the Portuguese record set by Luis Figo on Tuesday, had a quiet night against Iceland by his standards.
The 31-year-old forward, who scored 51 goals in 48 games in all competitions for Real Madrid, said after the game that he was not playing in his preferred role with the national team and he needed to adapt to play on the wing.
Asked about Ronaldo's comments, Santos said: "Ronaldo is not a winger or a centre-forward but a finisher. Physically he is very well. I give Ronaldo complete freedom so that he can deliver."
(Editing by Clare Fallon)
