The former Blancos and Brazil left-back believes his old club are in good condition and will be able to beat their biggest rivals in this week's clash between the two sides
Los Blancos have had a turbulent season with rumours of dressing room bust-ups and players losing faith in coach Jose Mourinho.
However, Carlos, who won three Champions League titles in 11 years with Real Madrid, revealed after watching the players train that he saw a different side to what has been reported.
He told the press: “I see a group with a good atmosphere despite their critics. I see people that are focused and confident.
“Real Madrid are in a good moment. They have to concentrate, live and enjoy the game.
“Much remains in front of this team and they are on the right track.”
And despite the recent criticism received by Mourinho, Carlos thinks he is the right man for the job.
“Mourinho has extensive experience in all competitions. Everyone says the same thing, that he is the best coach in the world," he added.
“He will prepare the team very well. We know the opponent is very strong, but a full Bernabeu is a spectacular setting and I can see this being a great game.
“The Clasico is the best game of the season. Whether in the league, cup or Europe, they are very important games. I’ve played in many, have had many good moments and I have also suffered.”