The former Wales assistant manager believes that the forward's combination with Cristiano Ronaldo at the Santiago Bernabeu could make Los Blancos an irresistible force
The forward secured a world-record switch from Tottenham on Sunday and was unveiled at the Santiago Bernabeu on Monday after signing a six-year deal with the Spanish giants.
Former Wales assistant Saunders, who coached Bale while John Toshack was national manager, believes that the 24-year-old will add huge quality to Carlo Ancelotti's squad.
|REAL MADRID LATEST
|5/4||Real Madrid are 5/4 with Paddy Power to win La Liga
"Imagine, you have him coming down one side and Ronaldo coming down the other side - good luck!"
Thousands of fans turned out for Bale's unveiling and Saunders feels that Bale's decision to briefly speak Spanish during the parade will endear him to the club's fans.
"Gareth has done the press conference in Spanish, which immediately makes everyone in Spain respect him and like him," he added. "He has done the right thing there and he has had some good advice."
Bale featured just once for Tottenham during pre-season and has not played a competitive match since the end of last term, with Andre Villas-Boas lamenting a lack of fitness for the forward, but he could make his first Madrid appearance against Villarreal on September 14.