The former midfielder said Juve will need some luck to advance to the quarter-finals, but he also talked up the strength of the Old Lady, per Calciomercato:
"We are going to Madrid months in advance. It is the demonstration that it is important to get to the second round, no matter if from first or second place. It is the most difficult draw and we also need a little luck. But we have a very strong team and we want to qualify.
"Atletico are a very difficult team to deal with. They are balanced. They play defensively and know how to hurt you with [Antoine] Griezmann. I foresee a difficult double challenge."
Nedved added that while summer signing Cristiano Ronaldo is "the man of the Champions League," the Italian giants will not be "counting on him only" in the latter stages of the tournament.
Juve qualified as winners of Group H, but only because Manchester United failed to beat Valencia on the final matchday.
Monday's draw showed once again that topping the group does not necessarily mean an easier match in the last 16.
Juve's Serie A rivals Roma, for example, finished second in Group G but got a winnable tie with Porto in the first knockout round:
Porto are a fantastic side, but they boast nothing like the recent Champions League pedigree of Atletico.
Juventus against Atletico is almost too close to call given the pair have combined to reach four of the last five finals in the tournament, losing all of them:
Both sides boast impressive defensive solidity, so it is a tie that will likely be decided on narrow margins.
And that could be where Ronaldo makes the difference.
The Portuguese thrives under pressure and on the biggest stages.
He will likely relish the opportunity to return to Madrid, and he has been a scourge for Atleti many times in the past:
As hinted at by Nedved, Juve would surely have preferred to be facing a team of Atleti's quality much later in the competition.
Diego Simeone's side are superbly drilled and know how to navigate two-legged ties in the Champions League.
But Juve will be confident they have the quality to get past Atleti in 2019.