I recommend the Hotel Emperador on the Gran Via.
A nice 4 star in an excellent location with large rooms and impressive lobby. The Santo Domingo Metro stop is just outside the front door. Easy walk to Puerta del Sol and Plaza Mayor etc.
The price will be les than 200 Euros.
for the best price.
Although I have never stayed there, the Hotel Villa Real has a very good reputation. I believe it is a 5 star. It is near the Prado, Starbuck's, Thyssen-Bornemisza, and Palace Hotel.