The Azzurri boss hailed his squad's character in the run-up to their first game of the tournament, while revealing that he has told Mario Balotelli to do his talking on the pitch
The Azzurri face the reigning European champions on Sunday in a game which may end up determining the eventual winners of Group C.
The 54-year-old has praised his players' character, among other qualities, while insisting La Roja are beatable.
"Spain are very strong but we have beaten them and no team is invincible," he told reporters. "I have a team with character, quality and willingness."
Prandelli then discussed his thinking behind the decision to field Daniele De Rossi as a centre-back against the Spaniards on Sunday, but is nonetheless confident the Roma midfielder will succeed in his new, deeper role in the side.
"We have tried many options which might be new to you but not to us," Prandelli continued. "We have talked about the line-up for days [but] everyone still has a chance of making the team."
"De Rossi is totally convinced about his ability to play centre-back. He has played there for Roma and if he had to play in this position he won't simply be a defender but a defensive midfielder.
"We want to use him in this position because during the match we could make tactical changes.
"We have to prepare the match according to our characteristics. We are fully aware we have a good team and if we pull together we can be really competitive.
"We want to keep Spain away from our penalty area. If they get there they'll create difficulties."
Andrea Pirlo is also another certainty on the team sheet for Italy, but Prandelli played down their reliance on the Juventus playmaker, claiming they will adopt different tactics if Spain successfully stifle his influence on proceedings.
"If [Spain do close down Pirlo], it will mean that we are playing well. And if there are difficulties of that kind of course we have tried some different tactics."
Manchester City striker Mario Balotelli has spoken of his intent to be on his best behaviour for Italy throughout the tournament.
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And Prandelli assured fans that he has told the 21-year-old to express himself on the field in the form of good performances, insisting he would be foolish to throw away his chance of success.
"I have asked Balotelli to do his talking on the pitch," he said.
"He has an extraordinary opportunity and cannot afford to throw it away."