Reinstated minister Judith Collins' time on the backbench allowed her to see she had got "caught up in" her work, she says.
Mr Key announced a reshuffle of his Cabinet yesterday, appointing Ms Collins as Police and Corrections Minister - both roles she has previously held.
Ms Collins resigned as a minister just weeks before last year's election after allegations she was involved in a campaign to discredit the then-head of the Serious Fraud Office, Adam Feeley. She was cleared of any involvement after an investigation by a High Court judge.
That followed months of controversy over her support for the dairy export company Oravida, to which she has close personal ties.
Ms Collins told Morning Report today that she had learned a few lessons in the time away from portfolios.
"I think one of the things is that I just got too caught up in a lot of things, particularly my work, and I think it's sometimes good to keep things in perspective."
She will take over Corrections from Sam Lotu-Iiga, in the wake of allegations of assaults and organised fights at prisons.
Ms Collins said the private company Serco was doing a good job of running the south Auckland prison, so she needed to find out what was different at Mt Eden.
The department took over the prison's management from Serco in July, after the allegations surfaced.
Ms Collins said she would be getting briefings from the out-going minister and the Corrections chief executive, and focus on getting the facts.
"I want to get to the bottom of it and make sure we do have a well-functioning prison," she said.
But Labour leader Andrew Little told the programme Ms Collins was the architect of the contract with the Serco, and she had to fix her mistakes.
He said Ms Collins did not have a strong track record as minister and he hoped Ms Collins had learned from her past mistakes.
Prime Minister John Key said Ms Collins had earned her place back at the table after learning from her experiences.
"I suspect the 12 months she's had on the back bench has given her a chance to reflect on that a little bit more and I think it will make her stronger as a minister."
Nobody was perfect and nobody got everything 100 percent right, he said.
Ms Collins said the Prime Minister had shown great confidence in her.
The Mt Eden remand facility has been in the headlines this year over assaults, organised fight clubs between prisoners, the removal of private company Serco from management of the prison, and teenagers having been locked up for 23 hours a day.
Outgoing Corrections Minister Sam Lotu-Iiga will take over the Local Government portfolio from Paula Bennett.
Not everyone impressed
New Zealand First leader Winston Peters is questioning the merits of Mr Key's reshuffle, including the reinstatement of Ms Collins.
Mr Peters said the Prime Minister was sending "mixed messages".
"The reality is that the Oravida situation was an absolute scandal, we all know it, and then of course you have the Dirty Politics engagement - and take out the SFO circumstance, nevertheless the remainder is there - so what exonerates someone like that from those circumstances?"
Meanwhile, Mr Little said Mr Key had done the opposition a favour by reinstating Ms Collins.
Mr Little said Ms Collins did not have a good track record as a minister.
"As ACC Minister she presided over one of the biggest privacy breaches and then sort of blamed everybody else. I think she will go down as one of the worst justice ministers we've had ... she'll be great fodder for us."
'Balls not baubles'
Mr Key also offered ACT leader David Seymour the ministerial portfolios of Minister for Regulatory Reform and Associate Education Minister.
But Mr Seymour turned that offer down, saying he wanted to keep his euthanasia bill on the agenda and also rebuild his party.
Mr Seymour said he was a first year MP who could already get a lot done as under-secretary for Education.
"You can see it was a difficult decision but ultimately I think New Zealanders want politicians with balls not baubles," he said.
Mr Key told post-Cabinet yesterday that he was surprised by Mr Seymour's decision but he also thought it was smart.
Mr Key's end-of-year reshuffle was prompted by the departure of Trade and Climate Change Issues Minister Tim Groser from Parliament to take up the role of New Zealand Ambassador to the United States.
Other ministerial changes include Paula Bennett picking up the climate change issues portfolio from Mr Groser.
Todd McClay takes on Tim Groser's trade portfolio, but hands over the revenue portfolio to Michael Woodhouse.
Former Westland mayor Maureen Pugh will replace Mr Groser as a list MP.
Mrs Pugh, who will be ranked number 51 on the list, said she planned to continue to advocate for her region.
"We've had quite a hit in some of the industries that are closing down here in the coal-mining and the Holcim factory up in Buller....So there are a few issues around employment."
Mrs Pugh will enter Parliament next year.