VMWare deleted the snapshot by mistake

You could only get back to a new state if you had took a snapshot recently. Sorry, but there is nothing you can do about it if you deleted the snapshot.

How about restoring back the last system state backup? Would that work?

how does it work to restore the last system state

Tell me if you select to Go To, it will just take you to the orginal state before the snapshot and yoiu can go back to new location.  But if you delete the snapshot then you loose everything.

First off you have to determine that your backup solution does a regular system state backup.

If so then it is a simple case of restoring that backup over the current system. Bear in mind you will lose data created between the backup and the real time.

But Antony what is the gaurantee that it will work in the virtual environment

I make no guarantees   :)

Is it possible if there is any vmdk file is available from where we can restore it

Thanks