Nadal has won every Monte Carlo Masters since 2005 - seven consecutive titles - but Djokovic is ready to end the world number two's dominance on the surface.
"Nadal is the ultimate challenge on clay. He's the King of Clay, the best player ever to play on this surface, and one of the best tennis players ever," said Djokovic.
"Winning in back-to-back finals against Rafa gives me a lot of confidence coming into the season now."
Nadal has won 37 consecutive matches in Monte Carlo and holds a 39-1 record overall.