Quality when reducing size

Hi guys.

I'm a newbie here and I've been doing research but I couldn't find the answer.

I am trying to put a logo onto a t-shirt and when i reduce it to a very very small size the quality of the logo goes really blurry and loses its edges.

Whereas if I do the same thing in Illustrator it will maintain its quality.

I like using photoshop because its easier to manipulate the image to how I want.. is there any way I can make the logo not lose quality when its very small? THank you