The defender has thrown his weight behind his teammate's bid to win the individual prize.
The Portuguese was named on the final three-man shortlist for the prize Monday, alongside Franck Ribery and Lionel Messi, with the winner set to be announced in Zurich on January 13.
Ronaldo was also one of 15 forwards nominated for the FIFPro World XI, and Pepe has thrown his weight behind his teammate's bid to be crowned the best player in the world.
"Cristiano is the only player who deserves the Ballon d'Or because it's an individual prize. He is having a great season and a great year," he told reporters at a news conference. "It's the most important thing. Spain won the World Cup four years ago and no Spanish player won the Ballon d'Or. Hopefully he continues helping us as he usually does.
"Ronaldo always is happy for staying with us again. I hope everything goes well. We want him to help Real Madrid and achieve his own personal marks this year."
Pepe was linked with a move to Manchester City over the summer, but the 30-year-old insists that talk of his possible departure were completely untrue.
"I never thought about leaving Real Madrid. The club loves me, and I'm happy and I like Madrid," he said.
Madrid is currently preparing for its final Champions League group stage clash away to FC Copenhagen, having already secured its place in the knockout stages of the competition with 13 points from five games.