Atletico, currently battling Barcelona and Real Madrid for command of La Liga, are firm favourites to take a San Siro win that would boost their chances of a first quarter-final appearance in the modern era of the competition.
Simeone knows the Rossoneri well having played for two seasons at city rivals Inter before leaving for Atletico where he won the league and Cup double with the Rojiblancos in 1996.
The former Argentinian international said Atletico will be going out to replicate the form that, despite a series of unexpected defeats, has kept their Spanish title bid on track.
But the 43-year-old, who steered Atletico to their second UEFA Europa League title in May 2012, said he expects an "open" game in which Milan will be looking to "exploit every opportunity".
"I won't start making predictions but I think it's going to be an open game and will also be important for us in terms of gauging how we should approach the second leg," Simeone told media on Tuesday.
"I don't think we're favourites. We have to go out and play our own game but we also have to have focus because Italian teams in these kinds of situations can move up a level."
Seedorf praises Atletico's organisation
In theory, Atletico could not be meeting Milan at a better time.
After a disastrous start to the season under Massimiliano Allegri, the Rossoneri reins were handed to Clarence Seedorf in early January.
But after three wins in five league games and a quarter-final exit from the Coppa Italia at the hands of Udinese, the jury remains out on the 37-year-old Dutchman.
Seedorf is the only player to have won Europe's most prestigious club trophy with three different clubs -- Ajax, Real Madrid and twice with Milan -- and spent ten golden years with Milan before his departure in 2012.
But as a coach he is untested at this level, and the pressure is on. If Milan don't win this season's competition -- a scenario which looks likely -- their chances of Champions League football next season already look slim.
"Atletico are well organised, strong and have great forwards," Seedorf said on Monday.
But whereas Milan marksman Mario Balotelli has scored only ten times in the league this season, Atletico's Diego Costa, on 21 goals, is only one behind championship leader Cristiano Ronaldo of Real Madrid.
And despite a Balotelli wonder goal on Friday, Seedorf's men put in an otherwise tepid performance against struggling Bologna.
Simeone watched that game and has already praised Balotelli's talent.
But despite the apparent gulf in current form between the Champions League opponents, he said Milan could emerge the better side.
"Milan are better, they're better," he insisted.
"They have very good players who are strong in attack and know how to play on the counter.
"They will be looking to exploit every opportunity. I really think Milan will be up for it tomorrow."