Heimir Hallgrimsson says Iceland's quick equaliser proved too big a psychological blow for England to recover from.
His team's dream Euro 2016 round-of-16 tie got off to the worst possible start when Wayne Rooney converted a penalty after just four minutes, but while Hallgrimsson said his team were shocked by the early concession, they coped a lot better with it than England managed when Ragnar Sigurdsson equalised just two minutes later.
Kolbeinn Sigthorsson sealed the win when he scored after 18 minutes.
"The equaliser was a key moment. We were shocked to concede that early, but immediately replying had an even bigger impact on them. It was huge psychologically," co-coach Hallgrimsson said.
"They wanted to finish us as soon as possible. You never know what would have happened had we not levelled the scoring right away.
"We always believe in ourselves and that is why we are here. If you want the best out of life, you have to be ready when the opportunity comes. And the boys were ready.
"This is a day people will talk about for the rest of our lives. And now we have an even bigger chance coming up. We are realistic. We have a game plan that we can use."
And while Hallgrimsson was clearly delighted with his side's most unlikely of triumphs, he believes there is more to come from his Nordic heroes.
"I think we have been improving slowly. This was our best game, both in defence and in attack. We didn't gave away a lot of chances and created some good chances ourselves. But our best is yet to come," he said.
"Our aim was to qualify from the group, from there on anything can happen. If we prepare well and the players do what they did today, we can beat anyone. But we can still lose against the big teams obviously. But confidence is growing and hopefully we can keep improving."
The co-coach - who also works as a dentist when he is not masterminding victories over some of the world's biggest footballing nations - was also keen to praise the fans ahead of the upcoming quarter-final with France.
"I would like to thank the Iceland fans who came here. They were amazing. The players were fantastic, but the fans were amazing," Hallgrimsson said.
"Hopefully we will get more tickets for the next game, so we can import more Icelandic people. And they should get tickets for the next game as well.
"The France game will be huge as well. But this might mean more to the players because we love English football, we grow up with it.
"We are incredibly happy with our centre-backs. They have been incredible. Ragnar's performance today was one of the best from a defender for Iceland. Big teams could go after him after this display.
"Every obstacle the players encounter from here on is smaller than what they have done now."