Gatland’s tourists stepped up their game after their first Test defeat and were helped by a red card for New Zealand centre Sonny Bill Williams for his shoulder charge on Anthony Watson.
It’s set up a series decider in Auckland next week with the two teams level at 1-1.
Gatland said: “We spoke last week about improving our physicality in terms of stopping their go forward and momentum. That was an area of significant improvement for us.
“The All Blacks were very effective in the third quarter and squeezed penalties out of us. At 18-9 down we had to show some character and we did that. It’s a win for us, it keeps the series alive. Obviously the Sonny Bill Williams red card was significant. We are not getting too carried away with it.
“We showed improvements in certain areas. Our kicking game wasn’t that brilliant at times. In the first half they kicked 16 times to our nine. But we showed some great character to come back and the way we controlled that last 10 minutes was especially significant.”
The Lions looked like they’d thrown away the chance of victory as they coughed up a series of penalties to fall 18-9 behind due to Beauden Barrett’s boot.
Barrett ended the game with seven penalties, but the All Blacks went down to defeat as tries from Wales No 8 Taulupe Faletau and scrum-half Conor Murray levelled the game at 21-21.
It set up a thrilling final 10 minutes which saw Owen Farrell strike with a match-winning penalty.
“I thought our loose forwards were excellent and the guys that came off the bench did a good job,” Gatland said.
“We have some sore bodies, but nothing serious to report. Given the experiences of four years ago, we will take the next 24 hours and just settle down.
“We will pick a team that we think will do the best job for next Saturday. Certain factions have tried to divide us, but they haven’t been successful in doing that. It’s been an incredibly united group of players. Everyone has been pushing each other on. You saw that in the celebrations in the changing room afterwards.
“You don’t get that unless you’ve got a group of guys that are proud of what has been achieved, not just the 23 but everyone in the squad.
“We will have a couple of days off to recover and then start thinking about the final Test in Auckland. I think it’s going to be pretty brutal next weekend.”
The All Blacks haven’t been beaten at Eden Park since 1994, and the Lions lost the first Test at the Auckland venue 30-15. Gatland is wary of a response from Steve Hansen’s men.
“We know historically when New Zealand teams lose they respond and there’s no better example of that than what happened in Chicago last year and then in Dublin in the following game,” he said.
“We know we are going to be in for an almighty battle in Eden Park next week, but we have come out of tonight with some belief and confidence. We kept the All Blacks tryless, I don’t know the last time that happened.
“In the first two Test matches, they haven’t really stretched us from an attacking perspective. We are the ones who have played some pretty positive rugby.
“We improved in certain areas and will look to improve further. Hopefully it will be one hell of a Test match in Eden Park next week.”