The Italian squad has not shown race-winning pace in the last four races after Fernando Alonso's victory in the Spanish Grand Prix.
Alonso, fourth in Germany on Sunday, said after the race that only strategy had helped the Italian team fight for a podium finish.
Despite the team's lack of competitiveness, Domenicali remains fully convinced that Ferrari can turn things around in the remaining races.
"It's doable, for sure. One hundred per cent," said Domenicali.
"If you believe a team like us would say the championship is finished after half the season, that is absolutely not the case. The thing we have to do is improve the car, full stop.
"Things change so quickly that we've seen in the last couple of races. There are nine races to go, everything is still possible."
Despite admitting that Ferrari needs to take a step forward with its car, Domenicali said that most important thing was to understand how Pirelli's new tyres work in order to achieve the best possible results.
"I believe now there is a very important element that has to be considered apart from the development of that - and that is really to understand how the new tyres will affect the performance of the car," he added.
"I would say that's the most critical thing. It's essential if you want to fight for the championship."
Even though Vettel retired from the British Grand Prix, allowing third-placed Alonso to claw back 15 points, the Ferrari driver has lost ground in the world championship fight since winning the Spanish GP in May.