The Koreans, who suffered their first defeat in the qualifying campaign for the 2018 tournament, failed to cope with the intensity of Team Melli's play and struggled to create any clear-cut chances against a determined Iranian defence.
"Our primary goal is to qualify for the World Cup but if we play like we did today, it may be difficult to accomplish that. It hurts to admit it, but we have to credit the better team," Stielike told reporters after the game.
"I sent Kim Shin-wook on in the second half to find ways to score but it didn't work out. I think it's due to the fact that we don't have a striker like Sebastian Soria," he added of the Qatari forward who troubled Korea in their previous match.
South Korea were often out-muscled by Iran, who comfortably won a majority of the physical duels, and Stielike feels the only way his side can overcome this weakness was to develop a better understanding of their brand of football.
"I know Iran pushed us around with their physical play but I think there's something fundamentally wrong that we still couldn't win here with new players and coaches," the 61-year-old German said.
"Our players tend to be smaller or weaker than the Iranian players. And it's going to take a lot of work to overcome that with solid play of our own."
South Korea, who are third in their qualifying group after four games, host second-placed Uzbekistan in a key encounter next month.
(Reporting by Shravanth Vijayakumar in Bengaluru; Editing by John O'Brien)
