Ellen, who hosted the awards show, made the joke during Sunday night's ceremony when she greeted Minnelli in the audience with, "Hello to the best Liza Minnelli impersonator I've ever seen. Good job, sir."
Minnelli has been a favorite subject for female impersonators and drag artists to imitate over the years, and has long been considered a gay icon. Many prominent LGBT figures took offense to Ellen's joke, even though the host is gay and has openly supported the LGBT community for years.
Minnelli did not seem particularly amused at the time of the joke, but told TMZ on Monday night that she "didn't think [Ellen] meant any harm at all" and that she considers the talk show star "a wonderful lady."
The 67-year-old singer and actress said that she thinks the joke "went a little astray on [Ellen]" and that the host obviously "thought the joke would be funny." Minnelli did express that the joke came off as mean-spirited because Ellen continued with her opening speech and did not stop to acknowledge that the two were friends after she made the jibe.
Minnelli also said that she is not disappointed about being left out of the epic selfie taken during the ceremony. Ellen posted a different picture of herself with Minnelli on her Twitter that same night. She captioned the photo #besties.