The Argentina international centre-back has signed a one-year deal with Diego Simeone's side after his contract with Malaga expired on June 30.
The 32-year-old passed a medical on Thursday and then spoke to reporters about the move, saying: "I'm very proud to have joined such a successful and winning group. Next year the team will compete even more than last season and there are many challenges to face."
Demichelis, who has also played for River Plate and Bayern Munich, joins an Atletico defence which conceded the least goals in La Liga last season, and will have to fight Diego Godin and Miranda for a regular place in the starting line-up.
"I know that I'm joining the best defence in the league I hope we can keep that up. I will come here with a humble attitude and will contribute what I can. I hope it's a successful year for me and for the team," he added.
"I know that Miranda and Godin have a huge amount of respect in the team, they have both performed exceptionally well in the last few years.
"My career has never been easy and I've always had healthy competition for places."
The Argentinian rejected moves to return to his boyhood club River Plate and also turned down a contract extension with Malaga. He explained that the presence of compatriot Simeone was key to him opting for the Rojiblancos.
He said: "It was a difficult decision because two clubs to which I am eternally grateful, River and Malaga, wanted to sign me. I went to Argentina and I was thinking about staying there, but then Atletico appeared and Simeone was key in convincing me to join a consolidated group that was playing for trophies.
"Simeone has known about me for a long time and is aware of my performances in the last few years. He is one of the main reasons I'm now an Atletico player."
Atletico, who finished third in the Primera Division last season and won the Copa del Rey, have signed forwards David Villa and Leo Baptistao already this summer and brought back goalkeeper Thibaut Courtois for a third year on loan from Chelsea.