Simeone's side put in a disjointed and poor performance, surrendering the initiative for most of the game and being unable to create meaningful chances.
They lost to an Olivier Giroud overhead kick, and will now have to win at Stamford Bridge to progress to the last eight.
But with just a single goal deficit heading into the second leg, Simeone is confident his side - who are also leading La Liga - can win the tie.
Speaking after the game, Simeone told Movistar: "If you'd said to me in September that we'd lose this first leg 1-0 and be top of the league, I'd have taken it for sure."
The second leg will take place at Stamford Bridge on March 17.