Levein, the club's director of football, described finishing fifth in the Premiership, as "frustrating and a tad disappointing".
"I've got high hopes for him [Cathro]," Levein said. "This is a tough place to manage, as I know myself.
"The thing about here is the players like him."
Levein points to mistakes in the January transfer window which saw Hearts sign nine players - six of whom have since left the club - as a chief reason for the underwhelming league campaign.
Dylan Bikey, Tasos Avlonitis, Lennard Sowah, Andraz Struna and Alexandros Tziolis are all moving on while Moha Choulay is returning to parent club Stoke City.
"Rushed is probably a fair assessment," Levein explained.
"We've had six transfer windows since the club came out of administration [in 2014]. Four of them have been really good, the last two haven't been particularly good.
"In hindsight, should we have given longer-term contracts to some of those players? The answer is probably no.
"The fact we gave them short-term contracts has allowed us to still be in a position to be able to strengthen this summer and repair some of the damage."
Levein says the "furore" surrounding 30-year-old Cathro since his arrival has been tough for the young head coach to deal with, but says the players enjoy working under him and will improve next season.
"For him to be a real success here we need to give him time and let him understand what this is all about," Levein explained. "Then we can let him go and play how he wants to play, but we need to fix some other things first.
"His problem early on has been understanding Scottish football, not understanding how he wants to play.
"In this country just now, Celtic are in a class of their own, Rangers play a different style of football to other teams, but the rest play the same.
"If you can't deal with long balls, second balls, wide crosses, then you can't impose yourself on the match.
"His early experiences have been about understanding that part of it. Once he deals with that part of it I think it will allow his coaching abilities to come to the fore."
Craig Levein retains "high hopes" for Ian Cathro's Hearts tenure but says the club will seek to "repair the damage" of recent transfer windows.