The draw for next year’s competition, which will be played in different cities across Europe, paired the holders against the winners of the last two FIFA World Cups.
One of Iceland, Bulgaria, Romania and Hungary will join the three heavyweights in Group F depending on the outcome of playoffs early next year.
Portugal defeated hosts France 1-0 to win EURO 2016 four years ago and they also go into EURO 2020 as winners of the inaugural Nations League after defeating the Netherlands on home soil this summer.
Despite boasting five-time Ballon d’or winner Cristiano Ronaldo and 2019 Golden Boy recipient Joao Felix, among other exciting talents in their ranks, Santos believes it will be difficult to see Portugal finishing above France and Germany.
"It will be a strong group, two favourites and a candidate," Santos told reporters.
"[France and Germany] have a responsibility to win and they have to assume that responsibility. We will believe in our possibilities. We come as candidates and obviously we want to win.
"Two world champions, a European champion and winner of the Nations League – I think this is a group that nobody wanted because each team wanted to avoid the other two.
"Everyone will respect each other and just wait to see who will be the fourth."
With the European Championships now expanded from 16 to 24 teams, the best four of the six third-placed sides are guaranteed a place in the knockout round of the competition.
Portugal progressed as one of the best third-placed sides in a group containing Hungary, Iceland and Austria at EURO 2016 before going on to win the tournament.
