Clarke was sacked late yesterday, following a run of four consecutive defeats that left the Midlands club two points above the Premier League relegation zone.
The 50-year-old Scot led West Brom to an eighth-place finish last season – their highest in the Premier League era – and Reid says that the players were left in the dark about their coach being shown the door.
“There is a shock. Sometimes in a dressing room you get a sense a change is coming, but this has come as a complete shock,” he told BBC television programme Match of the Day Extra.
“In recent weeks we can only put the results down to a drop in confidence. In the Premier League, when you go on a run of three or four games without a victory it can affect the confidence of the lads and then you are looking at ways you can get back on track.”
West Brom are yet to appoint Clarke’s successor, with assistant coach Keith Downing due to take control of first-team affairs on a temporary basis.
Reid backed the West Brom board to appoint the right man to succeed Clarke.
“You’ve got to leave that decision to the board,” he said.
“The last three appointments have gone really well – Roberto Di Matteo got us promotion, Roy Hodgson got us mid-table security and Steve Clarke took us to our highest Premier League position last season.”