Despite their 3-0 victory over Aston Villa on Sunday, Spurs finished sixth in the Barclays Premier League and missed out on Champions League football for a fourth consecutive campaign.
Tottenham's disappointing season hinged on the club's seven new signings last summer, who came with big reputations but failed to make the desired impact.
The new arrivals were brought in after the club sold Bale to Real Madrid and Sherwood believes the Welshman's departure ended the team's top-four bid before it even began.
"We're taking out one of the best players in the world and replacing him with seven players who have never played in this competition before," Sherwood said.
"How on earth did people think we would be title challengers or even make the top four?
"If you don't know the game you could possibly think that they would all hit the floor running but it doesn't happen, they need time.
"This club will be better with those seven players next season - they'll have experience of the competition and they will improve from that."
Tottenham finished the season with 69 points, three fewer than last season's club-record total of 72 - but 10 behind fourth-placed Arsenal
Spurs have come fourth only twice in the last 10 Premier League campaigns and Sherwood believes expectations last summer were far too high
"It was hyped - the hype was ridiculous," Sherwood said
"We've qualified for the Champions League once - why have we got a divine right to qualify for the Champions League?
"Where we've finished in sixth is where we should be, it's where we are as a club
"We all want to aspire to the top four and the title but we aren't getting there with what we've got
"To remove a match winner like Gareth Bale out of that squad - we shouldn't have expected it after that."
Spurs scored all three goals against Aston Villa before half-time as Paulinho finished from close range, Nathan Baker turned the ball into his own net and Emmanuel Adebayor converted a penalty after Gabriel Agbonlahor had blocked Sandro's shot with his hand
Paulinho's 14th-minute strike was the only goal Spurs have scored in the first 15 minutes of a league match this season and Sherwood was pleased with his side's fast start
"We've taken a lot of criticism this season about how we start games but it could have been over before we actually scored the first one," Sherwood said
"Once Paulinho tucks that away we were comfortable
"We all want to go on after half-time and score six or seven goals but it's not always going to be the case
"You can't flog a dead horse - these guys have played a long season."
Source : PA
Source: PA