The former Chelsea boss compared Sunday's top-of-the-table clash to a friendly and was dismissive of his team's title hopes this season
Les Parisiens are five points clear of the principality club, who are newly-promoted after winning Ligue 2 last season but bolstered their squad significantly with a summer of vast spending.
Dimitar Berbatov is the latest high profile name to arrive at Monaco after joining on a loan deal until the end of the season during the January transfer window, but despite drawing 1-1 with PSG in the first clash between the sides earlier this season, Ranieri has adopted a low-key approach to Sundays game.
"For us, Monaco-PSG is a friendly game," he told L'Equipe. "Monaco will try to win, but you have to acknowledge the truth.
"PSG have finished building a squad and we have not. It’s one thing to be positive and it’s another thing to acknowledge the truth.
"If we fail, we will be eight points behind PSG, but it doesn’t matter as we are not running for the title."