The aggregate score remained 2-2 at the end of extra time and the game went to a penalty shoot-out which City won 4-3 to earn a place in the quarter final draw.
"For a good hour I felt we were quite comfortable, very much in control, but I did say before the game that whoever scored the first goal would have a real impact," Hughes said after the match.
"We were looking to score first to put the tie to bed but, once Aalborg got a foothold in the game, they put us under pressure.
"In the end, we have been able to come through and we'll take the result on penalties, but we should never really have been in that situation.
"You scratch your head and wonder how that situation has developed but, if teams put balls in good areas, on occasion things will drop and go their way.
"At the end of the day, we are through to the next round and that is what we were trying to achieve.
"We would have preferred a more comfortable passage but we have been able to get where we wanted to get."