Modric left White Hart Lane for Santiago Bernabeu last summer, with the Croatian playmaker pushing for a switch as deadline day loomed.
There is a possibility that path will be trodden again in 2013, with Real making no secret of their admiration for Spurs forward Bale.
Florentino Perez - recently re-elected as Real president - has claimed that he would have no problem sanctioning a record-breaking move for Bale, with £80million bids mooted.
Modric believes a transfer would be beneficial to all concerned, with the Bernabeu providing an ideal stage for a player of Bale's ability to showcase his talent.
He told Marca: "It is a complicated issue for me because I was at Tottenham with him. I can tell you that we're friends and that he is an exceptional player.
"A club like Real Madrid, Tottenham or anyone else can only benefit from having a player like that.
"If he signs or not is a matter for the clubs, but if he ends up at Real Madrid that can only be good for us.
"As Real Madrid is a team of stars, Bale would fit perfectly. He would give us a different dimension. He can shoot, has strength and speed and is the type of player who could help us take a step forward."
It remains to be seen whether Bale will be turning out in the Spanish capital next season, but Modric insists he will be.
He has reiterated a desire to prove himself in Madrid, with reports linking him with a possible return to England and a reunion with former Real boss Jose Mourinho at Chelsea wide of the mark.
Modric added: "I have no doubt (I will stay). I want to remain at the best club in the world.
"It is a privilege to be here. I want to show more in the future and I am not thinking about anything other than continuing here next season.
"I think Real have only seen a little bit of my game. I can perform better and offer more. In the future I hope to do that and prove to the club and the fans that they were right to bring me here.
"I want to make sure that I have a good pre-season and prepare well for next season. That is important to me."