Falcao has scored 32 goals in 36 appearances in all competitions so far this season and has been linked with a summer move to Monaco, Manchester City and Chelsea.
The 27-year-old Colombian forward is under contract with Atletico until 2016 and on Wednesday played down talk of a move, but hinted it could happen if the Copa del Rey champions decide to cash in.
Simeone denied a deal has been made with Monaco following Atletico's 2-0 win over a Singapore Selection side in a charity friendly and said he would give Falcao his blessing if he decides to move on.
"I don't know anything official yet," Simeone told Marca.
"I have known him since he was a child and I wish him all the best. If he feels that he needs to make a move, I'll be happy for him. If he stays with us, I'll be happy too."
Falcao this week claimed he has not given any thought to a potential move at the end of the season but said he may end up leaving the Spanish capital if Atletico decide it is the right time to sell.
"I haven't thought about a move too much," he told Sky Sports News.
"The reality is that I have three years left on my contract with Atletico.
"It's true that last season during the summer there was a lot of speculation with clubs being named as a possible destination, but the truth is that I've not thought about it.
"Of course, it depends on what the financial needs of my club are and what sort of efforts Atletico make to keep me."
Monaco are the current favourites to sign the Colombia international, but Barclays Premier League side Chelsea are also being tipped to secure his services.
However, Falcao says he is not focusing on any speculation.
"I've been trying not to think too much about the rumours of clubs being linked with me," he said.
"Instead, I've been focusing on my objectives as a player and as a team member of Atletico Madrid."
Simeone was also asked about the future of Belgian goalkeeper Thibaut Courtois, who is on loan at Atletico from Chelsea, and said: "We are working on keeping him for another year."