The Iranian president made the remark in a cabinet meeting held on Sunday.
"Iran has a high capacity in various fields, especially sports," Ahmadinejad said. "Iran's Physical Education Organization should make more efforts to pave the way for the talents to be discovered."
"We must act in a way not to hurt people's feelings, especially the youth," he added.
Ahmadinejad's comments come after Iran's national soccer team suffered a 2-1 humiliating defeat against Saudi Arabia in its fifth World Cup qualifier in the presence of about 100,000 fans at Tehran's Azadi Stadium on Saturday.
The result moved Saudi Arabia to third spot in Asian Qualifying Group B with seven points. South Korea is currently in second place with eight points out of four matches. Iran is fourth with six points while the UAE sits at the bottom of the chart with only one point.
The 40-year-old Iranian boss apologized to the Iranians for the defeat and said, "I accept the (responsibility for) defeat, and I apologize to the Iranian people. But we still have the opportunity to make it to the World Cup."
The Iranian manager Ali Daei was sacked due to his weak performance during the World Cup qualifying matches.
According to the chairman of the Iranian Football Federation (IFF) Ali Kafashian, the IFF prefers to appoint an Iranian couch ahead of the upcoming games.