The celtic nation suffered a 3-1 defeat at the hands of world champions Spain on Tuesday night, which ended their chances of participation in Poland and Ukraine next year.
Despite not making the European Championships, Caldwell was impressed with his side’s fighting spirit in Alicante and feels they are getting better.
“Some of the football they played was exceptional. It was very difficult to deal with,”the Wigan man told Sky Sports.
“But nights like that are encouraging, we were up against the best team in the world and many teams would have folded but we never did and that was very encouraging.
“We showed we can compete and we are going to be playing lesser teams in the next competition and hopefully we will do a bit better.
“Craig Levein was a new manager at the start of the campaign and he had to find out things about the players and what formation he was going to play and we have got to a level now where the manager knows he can go forward and we can be successful,” the centre back concluded.
With Scotland in Group A alongside Croatia, Serbia, Belgium, Macedonia and Wales in the World Cup qualifiers, the Tartan Army will be hopeful of qualification to the 2014 tournament in Brazil.
By Gareth McKnight