The Italian believes that the Rossoneri's wealth of experience could be telling when the two teams meet in the Champions League on Wednesday
The Rossoneri have had a poor season this term and currently sit in ninth place in Serie A, while Diego Simeone's side are in the hunt for the Liga title.
However, the ex-Real Madrid boss believes that Milan's wealth of experience in the Champions League means they cannot be ruled out of the tie.
"Today Atletico are favourites, but be wary of Milan, we're talking about a team with extensive experience in Europe," he is quoted as saying by Marca.
"They are clearly not in a good period, but they have top players who can make the difference."
Sacchi went on to say that Simeone has transformed Atletico into a solid outfit, saying they are perhaps the most organised team in Europe.
"Atletico are a great team, a real team, who play with very clear ideas. I've seen them a few times this season and they're spectacular," he continued.
"I was struck by their game against Madrid at the Bernabeu in La Liga. They deserved to win. They're a strong, well connected team who have a lot of pace and work well together. Their collective game is at a great level.
"Simeone's work is great. There isn't a team as organised as Atletico in Europe. Their fluency in attack isn't always great, but the pressure is on the opponent. They have a great defensive organisation."
Finally, the Italian voiced his admiration for Diego Costa's all-round game, saying his defensive work exceeds that of other top strikers.
"I love Diego Costa's strength, aggression and grit. He's a modern striker who has been deployed in attack and defence," Sacchi said.
"There are plenty of good strikers who can only go in one direction, but he isn't one of them. He gives you a lot up front and at the back."