Ancelotti will come up against Simeone for the seventh time this season on Tuesday as Real visit Atleti in a UEFA Champions League quarter-final first leg clash.
Holders Real are winless in the six previous meetings between the clubs this term, and Ancelotti has nothing but respect for his opposite number.
"He is a great manager, just look at his achievements," Ancelotti said. "I really like the way he coaches, [he is] one of the best in the world. It is an honour and a problem to face him."
Real's last win over Atleti came in the 2014 Champions League final as they emerged victorious 4-1 after extra-time in Lisbon.
But Ancelotti would take a less emphatic result over two legs this time around.
"It's a very open tie. I have to say it's 50-50," he added. "Every game is different, every game has certain aspects, issues, each of the defeats have been different.
"We don't need to win both games, what we want to do is to qualify. You just look at two draws and you can qualify, but of course we're going to play to win.
"We want to put in a good quarter-final performance. Our objective is to win the 11th Champions League, not just beat Atletico Madrid."
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