Luckless Newcastle's record NRL losing streak will carry over into next season after their controversial 28-26 loss to St George Illawarra.
But coach Nathan Brown insists the club will start its pre-season in a better position to how they did last November.
An 80th-minute penalty goal by Gareth Widdop gave the Dragons their 10th win of the year at Kogarah Oval on Saturday afternoon.
But the call to award the penalty by referee Henry Perenara for interference from retiring Newcastle forward Jeremy Smith in the play-the-ball appeared harsh.
"He dropped it on my foot and I was just getting up. That's the story of our year," Smith said.
In a game in which the captain's challenge system was trialled but not used, the loss extended the Knights' losing run to 18 as they became the first side since Gold Coast in 1993 to win just one game in a season.
It was another harsh lesson for the Knights in the NRL's final round after they led 10-0 by the 12th minute and tied the scores at 26-all through a Mitch Barnett try with eight minutes to go.
"In the context of the game, there was no way that was a penalty," Brown said of the Smith incident before expanding on his hopes for 2017.
"At the start of the next pre-season, we will be in a far better position than we were last time.
"We lost 1200 games of experience and only gained Hokko (Trent Hodkinson).
"But now we have introduced a lot of young players to first grade and now we're under the salary cap.
"Daniel Saifiti was the best front-rower on the park today and he is only 19.
"Sione Mata'utia has moved to the back row and been great for us.
"We have had a lot of young players finding their way. It will be a tough pre-season but they have grown from young boys into young men."
The Dragons farewelled Ben Creagh, Benji Marshall, Mitch Rein and Mike Cooper.
They are yet to replace hooker Rein and halfback Marshall. That will likely happen in a frenzy of player movement after the season ends.
Dragons coach Paul McGregor said his side struggled for consistency and against adversity throughout 2016.
"Outside influences and outside pressure had a fair impact," he said.
"We have to do better adversity-wise, and we just made far too many fundamental mistakes."
Jason Nightingale and Joel Thompson scored two tries each for the Dragons as they ended the year on a winning note.
The Knights allowed four Dragons tries during a 15-minute period in the first half.
"In a 15-minute window, we basically lost the game," Brown said of the game that had no effect on the final make-up of the top eight.