"This West Indies team can play much better than they have done," said Lloyd.
"They played well in India and advanced to the final, something no one had expected them to do so," he added, referring to West Indies' runners-up finish in the Champions Trophy last year.
After moving through the group stage undefeated, Brian Lara's men suffered a 103-run defeat against the defending champions Australia, a seven-wicket thrashing by New Zealand and a crushing 113-run loss to Sri Lanka, as things turned from sweet to sour within six days.
The defeats of the local team have left millions of Caribbean fans disappointed, former players looking for scapegoats and organsiers fearing for the financial implications of stadiums being even emptier than what has been the case for the remaining matches.
Lloyd, who led his side to World Cup glory in 1975 and 1979 and a runners-up spot in 1983 to become the most successful West Indies captain of all time, said he would do his best to lift team morale.
"I hope to motivate the players by making them realise the pride of representing the West Indies at cricket," said Lloyd, a former coach, manager and now an adviser to the team.
"We have a lot of young and inexperienced players, who have not been exposed to much international cricket and they need backing."
Lara, West Indies captain, has been singled out as the main culprit for the team's demise, with former fast bowler Michael Holding demanding his removal as skipper.
Even a ten-day break, for which some players headed home to rest, has not been met with enthusiasm by some former players.
"We are hearing they need time to go home and relax and that's unbelievable in the middle of the tournament when they should be representing their people. Aren't other teams tired?" questioned former captain Richie Richardson.
Another former fast bowling great Joel Garner asked:
"Going home, for what?
"You can't walk off in the middle of the battle," said Garner.
"We have to be together and correct the errors."
The West Indies' next match is against South Africa, the world number one ranked team, on April 10 in Grenada.