Achieving that improvement was one of their tournament goals, and while they missed the prize, England gave their best.
"I'm so proud of what the players, and the staff, have done.
"Fifty-one days on these shores, and we've been outstanding every day.
"We pulled up a little bit short on a fantastic team, but we've done unbelievably over the last year."
Middleton said England would have swapped all their 30 world record consecutive wins to win the Cup.
"But that's rugby, that's sport. If you can look yourself in the mirror and say, 'I gave it my very best', you can live with whatever you get."
Both teams had put on a show they could be proud of for the final. The Black Ferns were a handful throughout.
"They're a great side, they've got some fantastic players. They've got blistering pace and they were difficult to contain when they had the ball."
The loss in Auckland was different to losing 2017's final in Belfast. The tournament had been a shot in the arm for the women's game.
"I feel hugely positive about what we've just witnessed."
With 30 seconds left in the game, and England throwing to a lineout on New Zealand's line, Middleton said he backed England to seal the win.
"But we didn't, and that's testimony - they were brave, and they went up. They challenged, and sometimes things are written in the stars, and I think it has been for the Black Ferns this tournament.
"The Black Ferns deserve the trophy. They have ridden every storm and a helluva storm over the last eight-10 months, and they've come out the other side of it."
England captain Sarah Hunter said she was gutted by the loss, especially after they battled with only 14 players for 60 minutes.
"Sport's cruel, sport doesn't end the way you want it to, and unfortunately, that was us tonight. Credit to New Zealand - they kept coming, found a way, and they've gone home with that trophy.
"They are the champions, but we can be proud, we didn't leave any stone unturned and that's what we wanted to do, that regardless of the result if we left everything on the pitch, we could be proud of ourselves."