Goalkeeper insists that the Foxes' title bid is genuine.
The Foxes had led 1-0 at half-time at the Emirates thanks to Jamie Vardy's penalty, but after Danny Simpson was sent off for two bookable offence they went on to lose 2-1 thanks to Danny Welbeck's 95th-minute winner.
That defeat closed the gap at the top of the table to just two points, but the Danish stopper is adamant that the result would have been different had there been no second-half numerical advantage.
Schmeichel told Leicester's official website: "We have lost just three games this season so we are not going to get bogged down by this, just as we don’t get too ahead of ourselves when we win. It is a loss but we get on with it.
"We are a good team and had it been 11 versus 11 I think that we would have gone on to get something, but it wasn’t to be. It is always frustrating when you concede in the last minute and when things go against you like they did today it is disappointing, but we have to just continue."
The league leaders have a long time to reflect on their last-minute heartbreak, as they are not in action again until they host relegation strugglers Norwich City on 27 February.
However, Schmeichel insists that, having beaten Manchester City 3-1 at the Etihad Stadium last weekend and more than matched the Gunners until going down to 10 men, Leicester have the character within their squad to go all the way this season.
He added: "We are a good team. People were probably getting ahead of themselves this week from the outside but we keep going. It is not the end of the world.
"We have bounced back before; we have the character in the camp. We will move on and we will have the same attitude as we do when we win. We just focus on us and we have as good a chance as anyone to have a very good season."
The 29-year-old 'keeper has played over 200 times for Leicester in all competitions since joining the then-Championship club from Leeds United in 2011.