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The defeat ended Rangers' hopes of winning a domestic treble but the Scottish Premier League leaders' title defence was boosted by Celtic's 4-0 defeat to St Mirren.
BBC: Cup exit self-inflicted, says Rangers boss Walter Smith
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Rangers' win ends Celtic's hopes of a domestic treble but, with both sides chasing the Scottish Premier League and Celtic still in the Scottish Cup, each Old Firm club remains in contention for a trophy double.
BBC: Celtic 1-2 Rangers (aet)
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Real were beaten by their arch-rivals Barcelona to both the La Liga title and the domestic cup, the Copa Del Rey, before witnessing an unprecedented treble when the Catalans beat England's Manchester United 2-0 to win the Champions League for the third time and cap a fantastic 2008-09 season.
CNN: Pellegrini unveiled as Real Madrid boss