Bayern will take on Carlo Ancelotti's side in the first-leg of a last-four tie on Wednesday in a repeat of the 2012 semifinal, which Bayern won on penalties.
Martinez believes los Blancos are the toughest side remaining in the competition which Bayern could have faced and has warned of the danger the club poses on the break.
"They're getting better, they're more compact and strong. I didn't want them in the semifinals of the Champions League. They're the toughest we could have faced," he told El Mundo. "They're very dangerous on the break. [Angel] Di Maria, [Gareth] Bale - who scored in the Copa del Rey final - or [Cristiano] Ronaldo, if he plays, create a lof of problems."
Martinez is backing his compatriots in the Atletico Madrid team to reach the final at the expense of Chelsea - especially with Spain striker Diego Costa enjoying the best season of his career so far - but warned that Jose Mourinho and his team cannot be underestimated.
"He [Costa] fights a lot and has a lot of ability to open up defenses. And he's in a great run of form. I wish Atleti lots of luck," said Martinez. "A team coached by Mourinho is never simple, he always does a great job in the knockouts. He prepares everything to reach his ultimate goal."
Martinez added that Bayern's focus far more on retaining possession under the stewardship of Pep Guardiola, but he maintains the style seen under Jupp Heynckes last season has not been lost.
"Guardiola has maintained the style of Heynckes, but he's changed many things and the play is different. Above all, in terms of the ball. Now we play more slowly, keeping the ball at all times."