Simeone, 46, has been in charge at Atletico since 2011 and has developed into one of the world's most highly rated coaches.
Although he may be wanted by numerous European giants, Simeone said coaching Real Madrid was out of the question.
"I will never coach Real Madrid," he told Onda Cero.
"It is logical because of feelings. They wouldn't call me either.
"I am young, maybe someday I will lead another Spanish team."
The former Argentina international reiterated his desire to one day coach the national team.
Simeone said: "At some point, I would like to coach Argentina, but I have to improve as a coach.
"I would like to do it in the final stretch of my career."