James, 28, is set to leave the Santiago Bernabeu, with Goal having reported that both Atletico and Napoli are keen on signing the Colombia international.
And Koke would seemingly like to see James join Atletico, talking up the former Bayern Munich midfielder's talent and insisting he would be welcomed should he make the switch to join Diego Simeone's side.
"He is a Madrid player," he told Cadena SER.
"He is a great player and we don't know what will happen. If he comes, he is welcome and if not, I wish him luck in the team he is at."
It is Napoli who are viewed as the favourites to land James, however, with Carlo Ancelotti keen to be reunited with a player he coached at both Real Madrid and Bayern Munich.
James's agent Jorge Mendes has suggested no club is close to finalising a deal for the player, telling reporters to ask Los Blancos president Florentino Perez if they want an update on his situation.
Atletico, meanwhile, have gone through a rebuild in the close season, signing the likes of Kieran Trippier, Marcos Llorente, Mario Hermoso and Joao Felix, for a club-record €126 million (£113m/$142m) fee from Benfica, among others.
And, with big things expected of 19-year-old Felix, he scored one and assisted two others in Atletico's 7-3 thrashing of Real Madrid at the International Champions Cup on Friday.
Koke has, however, urged fans to be patient with the Portugal international, insisting he needs the freedom to develop and learn under his team-mates and head coach Simeone.
"He is a great footballer and you have to be patient, you have to keep working and you'll see good things," he said.
"He gave two assists, scored and hopefully continues at this level. The boy is excited and you don't have to put pressure on him.
"Let him listen to his team-mates and the coach."