Philippe Clement declared Rangers as underdogs for the first time since he became manager after the Light Blues were drawn against Benfica in the last 16 of the Europa League.
The cinch Premiership leaders are scheduled to travel to Portugal for the first leg on March 7 before the return game at Ibrox a week later.
Benfica sit joint-top of the Portuguese Primeira Liga table with rivals Sporting Lisbon, having played a game more.
Clement, who took over the Ibrox hot seat from Michael Beale and who has dragged Rangers from seven points behind Celtic to two points clear of the Hoops at the top of the cinch Premiership ahead of the visit of third-placed Hearts on Saturday, surveyed a difficult but winnable European tie.
“It is a really exciting challenge because it is a very good team,” said the Belgian boss, who confirmed midfielder Todd Cantwell will be out for three to four weeks with a hamstring injury while striker Kemar Roofe returns to the squad after another lengthy spell out with injury.
“I think it will be the first game since I have been here that we have been underdogs in a game. That is the reality.
“I don’t see us as underdogs against Celtic. I see us as two teams at a similar level competing and so that is different to Benfica.
“I saw them last season against my old team Club Brugge and they were very impressive (won 7-1 on aggregate). But it doesn’t mean that we cannot qualify.
“We believe in our qualities and with the mentality that is in this group now, we can beat everybody but we have to be at our top form and we also need to have luck in key moments in the game.
“Of course European nights are important for the club and the stature of the club but you need to be realistic.
“You have to look at your budget, what you spent, the value of your squad and compare that.
“So in that way Benfica are in front of us but there is a really special story developing here and there is a lot of motivation, hunger and desire and with that we can do really amazing things so that is what we are going to try to do in those two games.”