Alcaraz eased past Bulgarian Grigor Dimitrov 6-2 7-5 on Sunday to set up a last-16 showdown with Zverev, who demolished Frenchman Hugo Grenier 6-1 6-0.
The pair met twice during last year's clay swing, with Alcaraz beating Zverev in Madrid to win his second ATP Masters 1000 title before Zverev got his revenge in the French Open quarter-finals a few weeks later.
"I really want to play that match. We played a few times, head-to-head he is up," Alcaraz said.
"I really want to show my great level here in front of my home crowd. I have great memories from last year in the final but obviously I have to be really focused in that match.
"I know that Zverev is a really good player, a really aggressive one with good serves. I have to show all my skills."
Alcaraz meets world number 16 Zverev on Tuesday. The German is 3-1 up in their career head-to-head meetings.