The Argentina striker has yet to score for Atletico this season, but Simeone believes the former Manchester City forward offers much more to the team than just goals.
"I think strikers with Julian's characteristics always need goals, not just him," Simeone said on Monday.
"It's true that beyond his finishing, he's a team player, a player that can link very well, he can assist, and he's got many more tools than just goalscoring."
Alvarez came close to ending his drought on Saturday when he hit the post as a substitute in Atletico's victory over Alaves. The result lifted Simeone's side to second in La Liga and extended their winning run to four matches.
Simeone was encouraged by Alvarez's contribution and wants the striker to build on that performance against United.
"He had a good second half in Saturday's game and we hope that he can keep growing and arriving to the place where we all want to see him," the Atletico coach said.
Alvarez scored for Argentina during the recent international break but has gone five matches without finding the net for his club.
His difficult start follows a summer in which he reportedly tried to secure a move to Spanish champions Barcelona.
Atletico will now look to Alvarez to help them maintain their momentum against a United side struggling for consistency.
Michael Carrick's team have lost their opening Champions League league-phase match against Sabah and are without a win in their last four games across all competitions. United have also endured their worst start to a Premier League season in 40 years.
Atletico, meanwhile, lost their opening league-phase fixture against Liverpool and will be eager to respond in front of their home supporters.
The Metropolitano stadium will host the Champions League final in June, but Simeone insists his immediate attention remains on the next challenge rather than the prospect of reaching the showpiece.
"Reality is the day-to-day, game by game," he said.
Simeone also expects a demanding contest against United and warned his players that managing their energy will be crucial.
"The game will be long, it will be tough, and we have to manage our efforts to compete well," he said.
Manchester United head coach Michael Carrick has admitted his team have fallen well below expectations this season but insists they can recover from their difficult start ahead of Tuesday's Champions League clash with Atletico Madrid.
Osasuna have sacked head coach Luis Miguel Ramis after just eight matches in charge and brought back former manager Jagoba Arrasate on a contract until 2029.
Bruno Guimaraes marked his first official home appearance at the Emirates Stadium with a decisive goal as Arsenal came from behind to beat Leeds United 2-1, giving the midfielder a memorable introduction to the home supporters.
Manchester United travel to Atletico Madrid on Tuesday seeking a morale-boosting Champions League win as Michael Carrick looks to restore consistency at Old Trafford.
