The Look Who's Talking actress and partner Maksim Chmerkovskiy were axed on Tuesday (November 13)'s elimination show, which also saw Gilles Marini and Peta Murgatroyd exit.
Speaking later to Access Hollywood, Alley spoke frankly about semi-finalists Shawn Johnson, Melissa Rycroft, Kelly Monaco, Emmitt Smith and Apolo Anton Ohno.
"[Maks] worked so hard and I gave it my best shot, but let's face it - there are dancers that are remaining that are far superior," she acknowledged.
Alley also said that she was happy to exit the competition prior to next week's Michael Jackson tribute on Dancing with the Stars given her real friendship with the late star.
"I feel good that I made this far and I know next week they're doing a Michael Jackson dance," the star said.
"I knew Michael Jackson, so I think maybe it's better that I'm not doing an interpretation of a Michael Jackson dance."
Alley previously commented that she is honoured to have even been invited to compete in Dancing with the Stars: All-Stars.
ABC next airs Dancing with the Stars: All-Stars on Monday (November 19) at 8/7c.