The Spain striker insists his side should not try to play down its title chances, even if it faces a tough task trying to compete against the big-spending Clásico duo.
Diego Simeone’s men have made a superb start to the new campaign, sitting second in the Primer Division after 13 games, as well making it through to the knockout stages of the Champions League as winners of Group G.
Villa insists Atletico should not try to play down its chances of competing for trophies at the highest level or have any doubts they belong at the top - despite fierce domestic competition.
“On paper and looking at the difference in resources it is complicated to fight against Barcelona and Real Madrid but in the league so far we have shown that we can,” the 31-year-old said to Marca. “We do know the league is not won in November or December - you win it in May. Hopefully, we can get to the last five or six games of the season still in with a chance to fight for it.
"We will not put in the excuse that we do not have the same resources. We will fight.”
Barca midfielder Cesc Fabregas was recently quoted as saying Atletico is a side capable of winning the Champions League, and Villa believes that receiving such praise proves the team is performing to an increasingly high level.
“It is good to hear people say that. It is the best compliment we can get. Let people see us as favorites for the league or the Champions League," the former Blaugrana forward said. “It is a good thing but what we must not do is deviate from what we are doing because we are only getting these compliments as a result of doing things the right way. “
Villa won the Champions League with Barca in 2011 and said playing in the competition is something he has always found special.
“The Champions League is a different competition, right from the hymn before the match, the environment..." Villa continued. “If you win the Champions League for the first time then the club gets a star on its shirt and that is forever. You can get to two, 10 or 12 after that but when you win Champions League for the first time you have entered another level.
“Hopefully, we can enjoy playing in this competition for a long time, until the end if possible."