The former Fiorentina boss knows that the Azzurri are up against it in the Polish capital but he believes that they can overcome Die Mannschaft if they adopt a positive approach.
The Azzurri will enter the last-four encounter as underdogs, with Die Mannschaft having won their last 15 competitive games.
However, just hours after captain Gianluigi Buffon urged his teammates and the Italian nation to dare to dream, Prandelli intends to do just that before the game.
"When I close my eyes and dream, I always dream of fantastic things," the 54-year-old coach told reporters at his pre-game press conference. "I will dream about a wonderful, fantastic evening."
Much has been made of the fact that Italy has had two days less to prepare for the match in the Polish capital but Prandelli insists that his players cannot allow themselves to be bogged down by such talk.
"We're all fit both mentally and physically," the former Fiorentina coach stated. "I don't think we can have any negative thoughts. We can't think we're even a little bit tired. All the ingredients are there to make sure we feel as we did a few days ago."
Indeed, Prandelli believes that Italy simply has no choice but to be braced for a high-tempo game, as he expects Germany to put his side under intense pressure right from the off and given it little space in which to work.
"We need to work on how we move around the pitch and free up a key player like [Claudio] Marchisio, [Daniele] De Rossi or [Riccardo] Montolivo," he explained. "We're ready to be pressed high up the pitch and know what we have to do to counteract this. They have a very defined style of play and we know what their strengths are."
Germany is viewed as the favorite for the match as it heads into this game on the back of four victories in as many matches in Poland and Ukraine, but Prandelli insists that Italy will not take a defensive approach to the game.
"People are saying tomorrow will be an open game but we cannot just sit deep," he explained. "We have worked on this for two years and it would be a shame to waste it and change our playing style."
Italy has managed just four goals in four games so far, but Prandelli revealed that he will not be placing any undue pressure on his misfiring forward line.
"I'll say very little to my strikers," he stated. "But the message will be simple - try to put the ball in the back of the net. We have to keep creating opportunities as that means we're more likely to score goals."
Prandelli was then asked about his opinion on controversial striker Mario Balotelli, and the 54-year-old coach admitted that he is seeing improvements in the Manchester City ace's behavior.
"I have no real problems with Mario, but it is interesting to figure out what goes on in the head of a 21-year-old young man," he said. "In terms of his behavior and mentality, I have noticed he has changed radically with us.
"The fact he wants to see his brother every day is great. I am very curious to see what sacrifices this young man is prepared to make to become a great footballer."
Italy's mouth-watering clash with Germany on Thursday will get underway at 2:45 p.m. ET.
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