The coach - who led Spain to European Championship glory in 2008 - thinks both Los Blancos and former club Atletico Madrid can make life difficult for Barcelona
The defending champions, who had a poor start to the domestic season, missed their chance to reduce the gap on Sunday when they drew with Tito Vilanova's league leaders.
"There are a lot of games for Real Madrid to recover the points they need and for a team like Madrid nothing is lost," Aragones told O Jogo.
Barca and Los Rojiblancos both sit on 19 points in the Liga table and Aragones has backed his former club to mount a title challenge of their own.
"Atletico is stronger than in previous years," he added.
"They can have a good season and be closer to their rivals, or even fight for the title if they can maintain this consistency."
Aragones, who has not coached since leaving Fenerbahce in 2009, also left the door open when asked about a possible managerial comeback, saying that he remained "strong enough to return to work".