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The Croatia international has missed the last two games after coach Diego Simeone revealed he had been suffering with a long-standing injury to his right ankle.
However, the 28-year-old striker trained on Sunday and will be available for Tuesday's quarter-final first leg at the Vicente Calderon.
Atleti are looking to extend their unbeaten run against city rivals Real to seven matches this season, having not tasted defeat in the derby fixtures since last year's UEFA Champions League final.
Former Bayern Munich forward Mandzukic has scored twice against Real in that run, including the final goal in February's 4-0 La Liga rout at the Calderon.
