The second-best place to level up is the Mideel forest.

The best place to level up is deep in the North Crater where you fight Magic Pots. You'd need lots and lots of elixirs for this method, and if you don't have or are not willing to use the W-Item glitch, this method is not advised. Also, an Enemy Lure materia helps A LOT.

EDIT: the bouncing balls in the Crater are also great, but they're rare. Even with an Enemy Lure materia, at most one in ten battles were with the bouncing red ball-things. Pretty inefficient. Unless you do Magic Pots as well, the Mideel Forest is better.