The best place to level up is definitely deep in the North Crater where the Magic Pots are. Of course, you need elixirs for this spot to be very effective.

The second best place would be Mideel forest.

The third best place would be the sunken plane(Gilenka). You need Yuffie with her Conformer and Morph for this spot to be very effective(I've never used this method, though. I stick to Mideel or Magic Pots).

Either way you pick, bring an Enemy Lure materia.