Hill and his team-mates suffered late heartbreak at Cardiff Arms Park as, despite playing for an hour a man down, they were drawing with Cardiff Blues until a late dramatic penalty won it for the home side.
The Wales international, who operated in the six jersey in the capital, admits the result was a bitter pill to swallow after the way in which the team battled.
However, he firmly believes it was still a vital step in the right direction ahead of the final Welsh derby of 2018 on home soil.
“We will take loads of positives out of it,” said Hill. “Credit to the boys, I am proud of the performance and we’ve got another massive game against the Ospreys coming up.
“We will have a few days off to enjoy Christmas with our families and the boys deserve that after really putting it in.
“I don’t think we are too far away from a derby win,” he added. “We showed that against the Blues when we played with 14 men and should have come away with a draw.
“We talk about a step in the right direction but we need results. We are working towards that and there is a lot of belief in the squad.
“We have just got to get those results, we are inches away and some decisions might go our way in the coming weeks.”
Hill was full of praise for the manner in which Dragons battled back in the face of adversity and drew level with seven minutes to go of a thrilling Guinness PRO14 clash.
“There was so much good in our performance and we hung on right in there until the end and it’s amazing what you can do when you hold onto the ball,” said Hill.
“We knew that we would be up against in the second half with 14 men and it was a massive wind, but all credit to the boys because there was belief in that changing room.
“It was a credit to the squad to really put a performance in. We spoke before the game that we get one chance every year to come here so let’s not waste it.
“I think that the performance was there, we’re just disappointed with the result.”
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