The 23-year-old left winger has been a revelation for Spurs since being converted from a full-back to play further forward by Harry Redknapp, and Bale's eye-catching displays in Europe have attracted the attention of top clubs.
Now Croatian star Modric - whose side beat Bales' Wales 2-0 on Tuesday night - feels the speedy winger would be a fantastic signing for Jose Mourinho's La Liga team.
"I agree [Bale] should play for Real Madrid and I hope he'll come", he told BBC Radio Wales.
"It would be amazing and I think he can [play for Real Madrid]. He's a good enough player."
Real currently trail bitter rivals Barcelona by eight points in La Liga after a stuttering start, but the acquisition of Bale could drive them on to a successful defence of their league title - although it is extremely unlikely Andre Villas-Boas will let his star leave in the January transfer window.
Bale led Wales to victory against Scotland on Friday night with a late penalty and a stunning solo strike, and after showing impressive form for Tottenham this year, the highlight being a powerful run and finish as Villas-Boas' side won 3-2 away to Manchester United in September.
The winger won the PFA Players' Player of the Year award for his performances during the 2010-11 campaign, including a hat-trick at the San Siro against Inter which won him widespread acclaim.
Spurs have a partnership scheme with Real which allows the two clubs to work together regarding players, coaching and commercial relationships, which could tip any future move in favour of the Madrid side.