The Hunky Dory actress starred in fellow 'Best Picture' nominee Good Will Hunting, but the film ultimately lost out to James Cameron's acclaimed blockbuster - a movie that she felt contained less than half an hour of brilliance.
"It was quite gutting to lose best picture to Titanic, which was really 20 minutes of a brilliant film at the end and the rest was like, you know, lovely," she told Magic Radio.
Driver went on to tip The Artist for victory at this week's Oscars, but admitted that she preferred some of its rivals.
"I think The Artist is going to sweep I must say," she said. "It was not my favourite film, I loved The Descendants and I love the Woody Allen film [Midnight In Paris]."
On the 'Best Actress' category, she continued: "I wish Rooney Mara could win [for Girl With The Dragon Tattoo], that is one of the most extraordinary [performances]... She is astonishing, I can't wait to see what she does."
The full interview with Driver airs on Magic 105.4 at 7pm tonight (February 26).
The 84th Academy Awards will take place at Hollywood's Kodak Theatre this evening, and will be shown on ABC in the US and Sky Movies in the UK.
Titanic will be re-released in 3D on April 6 to mark the original movie's 15th anniversary and the centenary of the sinking.
> 'Titanic 3D': Producer Jon Landau previews the dimensionalised epic
Watch a trailer for Titanic 3D below: