The Serie A giants have had an inauspicious Serie A campaign, winning just four of their 15 league fixtures so far, and edged into the knockout stages of Europe by hanging on to a 0-0 draw at home to Ajax with 10 men in their final Group H game.
Gandini recognised the attacking threat posed by Diego Simeone's side, who sit second in La Liga level on points with Barcelona, but believes a full strength Rossoneri can progress to the quarter-finals.
"Atletico are a very strong side who play great football under Simeone," he told reporters after the draw in Nyon on Monday.
"They are very strong in attack but it could be even worse for us considering the sides we could have picked.
"We will have to see how both sides will be in two months. We have had several injuries in the first part of the season, hopefully we will have a fully fit squad in February."
Milan face Roma on Monday at San Siro - they could bump up to eighth with a victory but defeat will see them rooted in 12th.