TLDR:
$this->data['MyModel']['password'] =
DboSource::expression('PASSWORD('.$password.')');
More Details:
I agree with the commenter that it's not ideal to do what you're asking, but if you really want to, you CAN run a regular MySQL query directly with the query() method. More info here:
http://book.cakephp.org/2.0/en/models/retrieving-your-data.html#model-query
Example:
$this->Picture->query("SELECT * FROM pictures LIMIT 2;");
Or use the method mentioned above in the "TLDR" which allows you to use MySQL functions to process your data.
Different (but recommended) method:
Here is the documentation on how to hash your password the CakePHP way:
http://book.cakephp.org/2.0/en/core-libraries/components/authentication.html#hashing-passwords
PASSWORD()function is used by the authentication system in MySQL Server; you should not use it in your own applications."