The former Manchester United and England defender led the La Liga giants for four months during the 2015/16 season, his only foray into the managerial arena.
He won just three of his 16 league games and while Neville says he will never go back into management, he underlined that he learned a lot from the experience.
The Sky Sports pundit said: “It was a decision that I made in two days and one that was influenced by a little bit of arrogance and ego.
"I had been at one of the most successful clubs in the world for 20 years, then moved to Sky - I felt unbreakable.
"But I quickly found out when you're unprepared and taking something on you're not qualified in, then you get a slap around the face.”
Neville also revealed the damaging impact of failing to follow the advice of his former United mentor Ferguson.
“Early on, it was clear that some players were unhappy,” he said.
“I should have made big decisions on players that weren't committed to club at that point.
“I remember speaking to Sir Alex Ferguson quite early on and his advice was: ‘Just get rid of them, son. Protect yourself. Only have people in the dressing room that are facing the same direction as you.’
“But I didn't listen. I tried to talk some players round to staying until the end of the season. But they weren't happy. I ignored Sir Alex Ferguson's advice. Not my wisest moment.
“After speaking to him, I remembered the part of Sir Alex that was incredibly loyal to players but I didn't concentrate on his ruthless side. That was a mistake.
“The times where he had to make clinical decisions that surprised many people but he knew were right for the club, like when he allowed Mark Hughes, Paul Ince and Andrei Kanchelskis all to leave in one summer when our generation were breaking through.
“The day I spoke to him, I thought 'that's easy for him to say' as he had the control and authority to do that.
“But if I went in and got rid of two senior players, what would that do to my dressing room? That was weak of me. I should have been decisive.
“I promised myself when I left Valencia that I'd never go weak on a big decision again. I went weak for a period of four months where I lost my confidence.”
In retrospect, Neville can see where he went wrong and what he would do differently if he had a second chance – although he insists his time as a coach is over.
“If I went into another coaching role, which will never happen, I would go in there with the best-in-class coaches to help me coach and communicate my philosophy to the players,” he said.
“I didn't have the hundred hours of being out on the grass coaching behind me. Steven Gerrard's got experience in to help at Rangers, Ole Gunnar Solskjaer has done it, Ryan Giggs has done it with Wales.
“I tried to do everything. It was complete naivety and arrogance on my part.”
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