The Liquigas-Cannondale rider finished third overall in the 2010 Giro d'Italia behind his teammate Ivan Basso and Spain's David Arroyo. He wants to do improve on that result and be the "best of the rest" behind Contador.
"Alberto has been clearly the strongest and he's got an important overall lead now. But we're going to make him sweat for his Giro win all the way to Milan," Nibali said on the second rest day.
"If I can finish second behind the best guy in the race, I'd be satisfied. It means that only Contador will have beaten me."
There has been tension between Nibali and Contador during the recent mountain stages, with Nibali attacking several times during the marathon stage to Gardeccia. Contador initially praised the young Italian but dismissed his attack as he did not consider it dangerous. The two also exchanged words on the Zoncolan stage, but Nibali played down the idea that there had been a war of words.
"It's all over and done with now. Perhaps (Miguel) Indurain raced a little differently, he left things to other riders, but times have changed. However, I've got a lot of respect for Contador. I've always admired him," he said.
Nibali is currently third overall, He is 51 seconds behind Italian rival Michele Scarponi (Lampre-ISD). He is confident of pulling back that time in the final week of the Giro.
"There are still six stages left to race and the final time trial in Milan is an advantage for me. I've also got to watch my back because there are some riders doing surprisingly well, like Gadret," he said.
Nibali ruled out an Italian alliance with Scarponi to try and topple Contador. The two fought for third place in the 2010 Giro d'Italia, with Nibali taking it by just 13 seconds and they have already tried to distance each other in the recent mountain stages.
"Michele is a big rival and it's not he first time we've been up against each other. I don't think there's a chance of an anti-Contador alliance. We're going to compete fairly."