Real Madrid will host Atletico in the first leg of their cup semi-final on Wednesday with Carlo Ancelotti's home side three points adrift of Simeone's men in the La Liga standings.
Atletico moved to the top of the Spanish league with a 4-0 thumping of Real Sociedad on the weekend, while third-placed Real were held to a 1-1 draw by Athletic Bilbao, which left Ancelotti's side just behind Barcelona on goal difference.
In September, Atletico defeated Real 1-0 at the Bernabeu in La Liga but Simeone has, somewhat unconvincingly, attempted to argue Ancelotti's side will be the favourites in the Copa del Rey semi-final.
"Well, I think Real Madrid have a lot of reasons to be favourite," the Argentine coach said.
"It doesn't mean they are going be the favourites during the game, but yes, they are the favourites when talking about the chances of both teams.
"It's like that. This is not a La Liga game, it's a knockout and that's different.
"It's going to be two games or one long one, as you prefer. We will see how it goes."
Atletico defeated Real 2-1 in extra time to win the Copa del Rey last season.
It was Atletico's first win over Real in any competition since October 1999.
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