Italy were thumped 4-0 by the world and European champions in the Euro 2012 final and lost to them again in last year's Confederations Cup semi-finals in a penalty shootout.
Prandelli is missing several regulars, including forward Mario Balotelli and midfielder Daniele De Rossi, for Wednesday's heavyweight clash at Atletico Madrid's Calderon stadium but urged his players to make the most of the chance to impress him before he selects his final squad for the World Cup finals.
"Tomorrow's game is risky because we are playing the world and European champions and because we have not had much time to prepare," Prandelli told a news conference.
"But these are the kind of matches that can help you in terms of growth and personality," he added. "That's why I urge the lads to show the best of themselves."
Spain typically dominate possession for long periods but Prandelli said sitting back and trying to catch them out on the counter attack was a tactic likely to backfire.
"We have to show personality in trying to get forward in numbers," he told reporters at the Calderon.
"If we opt to defend and counter attack for the whole 90 minutes we will suffer.
"We will try to defend with a high line because if we defend deep that means they are superior."
Italy, world champions in 2006, have been drawn in Group D for the finals in Brazil starting in June along with England, Uruguay and Costa Rica.
- Sports & Recreation
- Daniele De Rossi
- Mario Balotelli
- Atletico Madrid