Simeone led Atletico to their first La Liga title since 1996 last term, in addition to the final of the Champions League and semi-finals of the Copa del Rey.
"Right now Simeone is the best coach in the world," Hareide told reporters at a press conference.
"He has done a great job, won the league last season, and has a very well organised side. It is a perfectly oiled machine and his work with Atletico has been impeccable.
"He has successfully transformed the team into a winning one that wears you down on the pitch, whilst also elevating Atletico to great heights by fighting for La Liga and taking his players to the final of the Champions League."
Hareide takes his Swedish side to the Vicente Calderon on Wednesday.