Diego Simeone's men were unexpectedly beaten 3-0 at Osasuna last weekend and have slipped three points behind leaders Real, with just goal difference separating them from second-placed Barcelona.
But, despite the loss in Pamplona, Koke believes everyone is ready to set the record straight and complete a derby double on Sunday night, with Champions League qualification still his goal.
"The truth is that we believe in ourselves," he said.
"We have had a long week although sometimes we prefer to play. We had a week to work on individual aspects of each player and it has been good for us to be able to improve in order to play a good match on Sunday.
"Our fans always want to win a title. For the club it is important to be in the Champions League and create a great long-term project. I think the goals are being met.
"We are aware that we come from a major defeat because of the importance of the result. We are behind them but we have worked hard during the week to improve on the mistakes we made in the previous match."
Real go into the game on the back of a memorable 6-1 Champions League victory in Schalke on Wednesday night that has set Carlo Ancelotti's side up nicely to reach the quarter-finals.
Atletico got the better of Real with a 1-0 win at the Bernabeu in September but Ancelotti highlighted victories in both legs of their more recent Copa Del Rey semi-final clashes as key for his side.
"Both of those games gave us confidence because in the league derby, we had problems," he said.
"It is a very interesting league campaign, very exciting. There are three brave, strong sides battling for the title.
"It is a surprise because I thought that it would be between Barcelona and Madrid but Atletico are doing a fantastic job.
"It is very surprising to see that at this level, 60 points are not enough to be top of the table."