Lazio was comprehensively beaten by visiting Milan in Rome on Sunday (AEST) as Inzaghi's men fell seven points adrift of leader and defending champion Juventus, which had beaten Torino earlier in the day.
Without leading goalscorer Ciro Immobile and Felipe Caicedo because of suspension, Lazio's Scudetto dream was derailed by Hakan Calhanoglu, Zlatan Ibrahimovic and Ante Rebic at Stadio Olimpico, Milan leading 2-0 at half-time.
Lazio, eyeing its first league crown since 2000, now faces an uphill battle to overhaul Juve with eight matches remaining in 2019-2020, while Inter Milan could move within a point of second spot by beating Bologna on Monday (AEST).
"This defeat weighs on us in the table, but we knew that there were some objective difficulties today," Lazio head coach Inzaghi said. "We weren't very fortunate either, as we conceded a goal with a deflection, another on a penalty that Thomas Strakosha almost saved.
"Then we had two chances to get it back on track, only to concede the third goal. Unfortunately, I can't rotate the squad right now, so playing four games in under two weeks becomes difficult.
"We've got to look forward and prepare for the next match. We know the journey we have taken and have no intention of letting go. We'll probably lose [Joaquin] Correa to injury for the next one, we must try to rotate a little, because these lads are now very tired."
"Correa has been struggling with a calf problem for a few weeks," Inzaghi added. "If Caicedo and Immobile weren't suspended, he wouldn't have played today. Lucas Leiva had his first appearance today after just 25 minutes of training. We only made the decision after a fitness test this morning.
"Bobby Adekanye hadn't played for 25 days either, [Sergej] Milinkovic-Savic and Correa told me they weren't feeling right. It was difficult against Milan in these circumstances. Even then I have to think we could’ve got back into it at 2-1.
"Initially, Luis Alberto was meant to be in support of Correa, but we were lacking a physical presence and hadn't really used this tactic without Immobile. If we'd had Adekanye in training during the week, I probably would've started him, as he is at least a centre-forward."
It was a return to form for Milan, which faced defeat before rallying to earn a 2-2 draw at relegation-threatened SPAL last time out.
Milan, with Ibrahimovic back in the line-up, dominated against Lazio as it stayed on track to qualify for the UEFA Europa League next season.
"We work really well at Milanello, I always said that I had a group of responsible players who are aware of the importance of the shirt they are wearing," Milan boss Stefano Pioli, who is tipped to be replaced by Ralf Rangnick at the end of the campaign, said.
"I don't know what will happen with our future, with my future, but we are too concentrated on fighting to the end so we can at least get Milan back into the [UEFA] Europa League.
"We won't get the [UEFA] Champions League now, but Milan is a prestigious club and has to be in European competition.
"The players are continuing to give 110 per cent, even those who signed contracts to the end of the season and probably won't remain here after that. They are determined to prove they are still strong players at this level and to give their best for Milan."
Ibrahimovic, back in the line-up after recovering from a calf injury, converted a first-half penalty to take his tally to five goals since returning to Milan from LA Galaxy in January.
"Ibra has allowed us to grow in terms of mentality, quality, technique, it's a real pleasure to work with him and see how he deals with his team-mates," Pioli, whose Milan hosts Juve on Wednesday (AEST), said.
"Now we've got a month left and can continue pushing all the way."