Hudson: We didn't play to our potential
Hill won 18-9 in front of a large Mannings crowd, despite having centre Matt Powell sent off for a spear tackle on Simon Rugman.
Tony Bean and Kurt Brown were also sin-binned as Hill finished the game with just 13 men.
Hudson said: "It's the first time a lot of our young players have played in a proper Forest derby and they were a bit like rabbits in the headlights.
"We like to create space but they (Berry Hill) tied us into a forwards game. It became a confrontation."
"It's the worst we've played since I've been at the club and Hill were certainly the better side on the day."
Hudson defended Berry Hill's Matt Powell, saying: "I'm not sure it warranted a red card, maybe a yellow.
"Only Matt will know his intentions but there had been a few high tackles in the game before that."
Hudson believes Drybrook badly missed the leadership of number eight Neil Morgan, who has been sidelined with injury for most of the season.
Andy Reid (knee) and Chris Thomas (shoulder) have also suffered serious injuries this year, with both unlikely to play again.
Berry Hill coach Julian Horrobin said: "These derbies still mean something. We've gained some momentum these past few weeks and I'm proud of the way we went there and did a job.
"I still get nervous on Saturdays. When I played the nerves went as soon as you made your first tackle, but on Saturday they stayed with me for the whole game.
"We showed huge commitment to defend so well with 13 men. We played to a plan. They had no-one running the show and no kicking game."
Horrobin says he is considering appealing against Powell's red card.
"We had a young ref who didn't understand the mechanics of the tackle.
"Matt didn't drive him into the ground. There was no malice and no intent."
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