The Wasps player-manager has been named League One manager of the month for February after three wins and a draw and his side sit second from top.
"Since I took myself out of the team we've started playing well," he told league sponsor Ladbrokes.
"I was finding it difficult at the beginning to do both. I wasn't giving 100% to either role."
But the 35-year-old midfielder, who took charge in October after Jack Ross moved to Goodwin's former club, St Mirren, is not ending his playing career just yet.
"I'm not making an official announcement that I'm retiring," said Goodwin, whose side sit second in the table and look certainties for at least a promotion play-off place.
"I still keep myself fit and train with the boys twice a week and, if needs must, if we get a number of suspensions and injuries between now and the end of the season, I want to be able to play.
"At this moment in time, the lads who are in my position are playing extremely well and I couldn't justify playing myself.
"I felt it was better for me if I was going to give the opportunity the best crack then I should take myself out of the playing side of it, which has benefitted me greatly.
"I'm now able to see the bigger picture from the side of the park and able to have more of an influence on tactical decisions and substitutions."
Alloa began the month with a 2-2 draw at home to leaders Livingston and have since narrowed the gap at the top to seven points with nine games left.
"At one stage, they had a 12-point gap and people probably looked at it and thought it was impossible for us to catch them," said Goodwin.
"But we never believed that it was over and still don't to this day.
"They're certainly in the driving seat, it's their's to lose, but if they're going to win the league then they'll have to go and get it. We won't hand it to them.
"If they go and lose on Saturday and we win then it's down to four and we have to play each other."

The call came after "significant human remains" were found at the site of a former home in the Republic of Ireland.
The home was run by the Bon Secours order of nuns in Tuam, County Galway.
The bodies ranged from premature babies to three year olds.
The discovery was made as part of an investigation into claims by a local historian that up to 800 babies and young children died at the home and were buried in unmarked graves.
Amnesty International has said that archaeological surveys should be carried out at all former mother-and-baby homes in Northern Ireland.
Archbishop Martin said many in the church and society were "ashamed" of what had emerged at the home in Tuam.
He added that "families are owed an apology" and that the church had repeated an apology it made in 2014 when the claims "first came to light".
"It makes me feel awful. I feel incredibly sad in recent days. We as a church do not want to repeat the awful mistakes of the past."
He added: "It's an appalling time for us and everyone in society.
"We're opening up a whole chapter in the society in Ireland and the rest of the world where there was a terrible stigma against unwed mothers.
"There was a terrible time, we in society and in the church isolated and stigmatised them."
Meanwhile, the Irish children's minister Katherine Zappone has said that 474 "unclaimed infant remains" from mother-and-baby homes were transferred to medical schools between 1940 and 1965.
Irish national broadcaster RTÉ made claims about the transfer of remains in a 2011 documentary.
Ms Zappone told the Dáil (Irish parliament) that the transfer of remains was "part of a tapestry of oppression, abuse and systematic human rights violations that took place all over this country for decades".
She also said an interim report into the home in Tuam would be published by the end of March, a move Archbishop Martin said the Catholic Church supported.
Jim Goodwin has put Alloa Athletic's turnaround in form down to his decision to drop himself.
[NEXT_CONCEPT]
The leader of the Catholic Church in Ireland has backed a call by Amnesty International for an inquiry into mother-and-baby homes in Northern Ireland.