The Dane led the Swans to their first-ever domestic cup success on Sunday, as they thrashed Bradford 5-0 in the Capital One Cup final at Wembley.
And Welshman Toshack believes the nine-time European champions have now earmarked Laudrup, who previously featured for Los Blancos for two seasons as a player, as their next manager.
"I know they are looking at him," he told the Daily Mail.
"It is entirely understandable that the Swansea boss is being looked at by Real Madrid, where Laudrup played from 1994 to 1996. There is interest. But would Laudrup want to break one of football's perfect marriages?"
Toshack also compared Laudrup to Dutch great Johan Cruyff, citing his success as both a player and manager.
He continued: "In my experience, managers who have played at a high level don't look into the game too deeply. They don't need to do that.
"There is an understanding of top players, of what makes them tick. Cruyff had it. Laudrup has picked up on that and run with it as a manager."
And, while Laudrup has enjoyed a historic start to his Swansea career, Toshack believes the lure of Real Madrid could prove too strong to turn down.
"Management is funny. The chance to manage Real Madrid doesn't come along too often. And, as happened when I left Sociedad for Madrid, you can always go back," he added.
A recent poll by Spanish newspaper AS saw 78 percent of 40,000 Real Madrid fans state they would prefer Laudrup to both Rafael Benitez and Carlo Ancelotti.