The submersible, which was owned by the private-diving company OceanGate, was carrying five people to see the Titanic shipwreck at around 13,000 feet under the surface when it lost contact with its mother ship on Sunday afternoon.
Debris from the missing sub was discovered Thursday after an intense four-day search. The US Coast Guard said the debris was "consistent with the catastrophic loss of the pressure chamber."
Cameron said he let his "inner circle of people know that we had lost our comrades" and "encouraged everybody to raise a glass" after he received "confirmation that there was some kind of loud noise consistent with an implosion event."
"The only scenario that I could come up with in my mind that could account for that was an implosion," he told Cooper. "A shock-wave event so powerful that it actually took out a secondary system that has its own pressure vessel and its own battery power supply, which is the transponder that the ship uses to track where the sub is. So I was thinking of implosion then. That's Monday morning."
Cameron added that the outcome of the crisis "wasn't a surprise."
"I watched over the ensuing days this whole sort of everybody running around with their hair on fire search, knowing full well that it was futile – hoping against hope that I was wrong but knowing in my bones that I wasn't," he said.
"I just feel terrible for the families that had to go through all of these false hopes that kept getting dangled, you know, as it played out."