The Inter defender believes the national team have made good strides under the guidance of Cesare Prandelli and can challenge for honours in next year's tournament
Cesare Prandelli's men are already through to next year's tournament in Poland and Ukraine and are set to face Serbia in their Group C qualifier on Friday night.
Ranocchia feels Italy have come a long way since World Cup 2010, where they were eliminated at the group stage under Marcello Lippi.
The Inter man has credited Prandelli with restoring order to the squad and feels they have a great chance of taking the Euro crown off current holders Spain.
"I think the favourites to win the Euros are Spain as they won the World Cup and they express the best football on a worldwide scale," Ranocchia told Uefa.com.
"But we are working towards this, our objective is to play a good European Championship and hopefully win it.
"We came out of the World Cup having messed up but the coach has restored our enthusiasm."
Meanwhile, Giuseppe Rossi has fully recovered from a knee injury and La Gazzetta dello Sport reports that the Villarreal striker completed a full training session on Thursday.