PSG boss Unai Emery is also confident that his side can end talk of Real clinching a third European title on the bounce.
The last 16 is a good moment to play such teams.
The two teams have met on five previous occasions in the Champions League knockout stages, but Conte added: "The past is the past".
The biggest tie of the round, though, sees Madrid - winners in both 2016 and 2017 - facing a PSG side widely considered among the leading contenders to win the trophy this season after bringing in Neymar, Kylian Mbappe and Dani Alves in the summer.
"Every summer they have signed great players, they get stronger all the time and they have had a almost impeccable group stage", acknowledged Butragueno.
"I have to be realistic, we have to face this situation with these players".
Antonio Conte's position at Chelsea is beginning to come under scrutiny once again from the club's top figures behind the scenes, with the Blues already well out of the Premier League title race.
"We must be very realistic to understand that this league is very unsafe".
With a potential mid-week replay in the FA cup to begin with, then Conte's men will be making the trip back to Manchester to take on, Manchester City in another Premier league clash.
"I think this type of game is a good chance for every player to show the right value. I think we are ready for that".
Manchester United and Chelsea failed to qualify for last season's Champions League and Arsenal now are in the Europa League after a fifth-placed league finish.