Los Rojiblancos entered Sunday's match looking to capitalise on Barcelona's draw with Getafe a day earlier and stretch their lead at the top of La Liga to six points.
However, Simeone's men were stunned by Levante, as a Filipe Luis own goal gave the hosts the lead before David Barral killed the game off in the second half.
The result means Atletico are now three points clear of Barca and six ahead of their Champions League final opponents Real Madrid, who have two games in hand over them, with just two matches remaining.
Simeone, though, believes a defeat is the best result as it will inspire his side to finish the campaing strongly.
"The defeat was the best thing that could happen to us," he told reporters. "That leads us to three weeks of high intensity and great emotion, it is the ideal moment for the players, they will surely have a fantastic three weeks.
"The team tried and had several chances. Their goalkeeper had a great game. Levante did very well.
"Now we have to focus in the first final we have: Malaga [at the Vicente Calderon on May 11]."