The former Tottenham star believes that the Spanish giants are the team to beat in European club football's elite competition and is satisfied with his progress with los Blancos
The Spanish champions had to settle for second spot in Group D as Borussia Dortmund proved to be too strong for Madrid, but the Croatia international nonetheless feels that los Blancos are the team to beat in the knockout stages.
"Whoever we draw in the next round it will be a hard tie, but if we play as we can then we will be favourites to advance," Modric told reporters.
"In fact, I think we are the favourites to win the Champions League."
The 27-year-old impressed in Madrid's 4-1 win over Ajax on Tuesday and declared himself pleased with the way that things are going for him at the Santiago Bernabeu.
"I have been here three months now and I am used to the rest of the players and the coach's demands," Modric noted. "I am happy with my progression."
The Croatian has made 18 official appearances for Madrid so far this term, scoring once in the process.