Los Blancos have beaten Valencia, Celta Vigo, and Espanyol as well as thumping bottom side Real Betis since they salvaged a 2-2 draw at Osasuna in mid-December.
Real have subsequently moved to within a point of Barcelona and Atletico Madrid at the top of La Liga and Ferrer feels ex-Tottenham man Modric's ability on the ball has allowed Carlo Ancelotti's side to play in a more expansive fashion.
"Modric is very important for Real," said Ferrer, a onetime right-back who won the Spanish title five times, and the European Cup once, during a hugely successful stint with Barcelona in the 1990s.
"He is getting more of the ball now that he is playing in a deeper role alongside Xabi Alonso in central midfield, so a lot of the attacking situations that Real have come from him.
"Real were very defensive with Sami Khedira (who is out for the rest of the season with a torn anterior cruciate ligament) and Alonso, but now they have a better balance and more possession."
Real's Argentina international Angel Di Maria has adopted a new role over recent weeks, featuring in a central position as opposed to out wide and terrorising La Liga full-backs.
The 25-year-old - who netted in the 5-0 mauling of Betis as well as against Valencia - may have to remain in the middle with Ballon d'Or winner Cristiano Ronaldo and Gareth Bale flourishing on the flanks.
And Ferrer thinks Di Maria could thrive in that area of the pitch - provided he is well advised by Ancelotti and the Real coaching staff.
"If you are playing a 4-3-3 system with only one holding midfielder, Di Maria will find it difficult, but if he has Alonso and Modric behind him and he is in the hole he can play like a second striker," said the former Chelsea player.
"He has good skills and can get the ball from defenders or midfielders and keep it - but he will need to be told to do more tactical things and work hard, not go everywhere like a typical winger."
Real's city rivals, Atletico, meanwhile, remain in contention to win the Spanish top flight for the first time since 1996, but Ferrer feels that Diego Simeone's preference not to make alterations to his team - and a clutch of games in other competitions - could scupper their dream.
"A team that wants to fight for big competitions has to rotate a little bit more, especially a team as physical and that does as much running as Atletico," he added.
"They have the easiest looking fixtures (over the next six weeks) out of the top three, but even if they go two or three points ahead I doubt they can keep it up until the end of the season with Champions League and Copa del Rey matches to contend with."