Simeone, 46, has been in charge at Atletico since 2011 and has developed into one of the world's most highly rated coaches.
Under the Argentinian, Atletico have won a Europa League, a league title and numerous cups, while reaching two Champions League finals.
Although he may be wanted by numerous European giants, Simeone said coaching Real Madrid was out of the question.
"I will never coach Real Madrid," he told Onda Cero.
"It is logical because of feelings. They wouldn't call me either.
"I am young, maybe someday I will lead another Spanish team."