The Reds suffered a second straight defeat as they lost 2-1 at Wolves in the cup on Monday.
It came after their unbeaten top-flight run this season was ended by title rivals Manchester City last week.
They go to Brighton still four points clear at the top on Saturday but Milner knows Liverpool need to improve after recent disappointments.
“Back-to-back defeats isn’t really good enough for us but you have blips in a season,” said the 33-year-old.
“It’s not something you want, especially at Liverpool, we know what’s expected. We have to make sure we bounce back and look at where we can get better.
“It’s not about blips, they are expected but it’s how you respond and bounce back. You’ve seen the character in the squad over the last few years, and the players we have, to know we will bounce back.
“It’s easier saying that but we have to do that at the weekend.”
Milner’s mistake, when he lost possession to Diogo Jota, allowed Raul Jimenez to open the scoring and the former England midfielder took the blame.
He said: “I should do better. The pitch all night was a bit tricky and lively. It’s the same for both teams. It was my mistake for the first goal and it’s cost us, if not it’s 1-1 and we get a replay.
“It was a pretty good finish from their lad but they didn’t have many chances. We didn’t either but that’s what separated the teams, my mistake and a very good finish for the second goal.”
Ruben Neves scored Wolves’ second-half winner from 25 yards just four minutes after Divock Origi had equalised.