"My model is Lula because he uses this model that makes permanent negotiation the center of his policy," Mujica told Uruguay's Busqueda weekly.
He was held in prison for 14 years before his release in 1985, when democracy was restored to Uruguay after its 1973-1985 dictatorship.
A former agriculture minister between 2005 and 2008, Mujica has cultivated an informal style, largely eschewing suits, and tends to speak in an off-the-cuff manner that delights his supporters.
When centre-right former president Jorge Battle suggested that the Tupamaros movement had links to a recently uncovered weapons cache, Mujica gave a characteristically flamboyant response.
"I'm going to send him a bottle of Viagra so he can amuse himself with more useful things than saying this kind of crap," said Mujica, who also goes by the nickname "Pepe".
Despite his colourful pronouncements and background, Mujica's political platform is far from radical, analysts say.
His running mate is former finance minister Danilo Astori, considered a political pragmatist, and the pair are running on a platform that would maintain the economic policies of Tabare Vazquez, the popular outgoing president.
Vazquez, who is constitutionally prohibited from running for office again, has a 71 per cent approval rating thanks in large part to economic policies that have allowed Uruguay to avoid a recession while keeping unemployment low and even reducing poverty levels from 26 per cent in 2007 to 20.5 per cent in 2008.
Mujica and Vazquez have traded the most barbs over abortion.
The outgoing president vetoed a law last year that would have decriminalized the procedure, but Mujica has said he would not do the same.
Lacalle, 68, who served as conservative president of Uruguay between 1990 and 1995, is against abortion.
He has also distanced himself from the Vasquez government by pledging to abolish an income tax they imposed.
Despite garnering significantly less of the vote than Mujica in the first round, Lacalle could win over a number of supporters from centre-right candidate Pedro Bordaberry, who was eliminated after garnering just 16 per cent of the October vote.
Lacalle has campaigned in large part on a law and order platform, running advertisements featuring shop surveillance footage from robberies, but his efforts may be in vain, with recent polls showing him at least five points behind Mujica.