The Spaniard believes the Bernabeu outfit is already competitive ahead of the new season and paid tribute to assistant coach Zinedine Zidane
Los Blancos were beaten to La Liga by Barcelona last season and lost the Copa del Rey final to Atletico Madrid, resulting in the departure of Jose Mourinho and the arrival of Carlo Ancelotti in the Madrid hotseat.
The Italian has wasted little time in stamping his mark on the side, bringing in the likes of Isco, Asier Illarramendi, Dani Carvajal and Casemiro, as well as chasing Gareth Bale from Tottenham.
And far from feeling his first-team status is under threat, Alonso has claimed the newfound squad depth will set his side apart from its rivals instead.
"I think the new signings have been good for the team and the important things is that we have built a base," the 31-year-old said in an interview with Adidas. "I'm sure each new player will contribute and the more options the coach has, the better. I think we know each other well. We have been together for some time now.
"We are feeling very good about the season and have the highest of expectations."
Ancelotti will be joined in the dugout by club icon Zinedine Zidane and Alonso has emphasized how the former Champions League winner's expertise will be of great use.
"I have always admired him [Zidane] a lot. He is someone every footballer looks up to," he continued. "I'm very motivated about working alongside him because of everything he has achieved and experienced.
"When you are at a club like Real Madrid you know each game is fundamental and you go for victory in every single game.
"We are excited about the new season but now we have to put everything into practice on the pitch and make a strong start."
"Little by little I'm easing myself back in [from groin surgery] but my team-mates are happy and training hard in intense sessions in order to get fit."
The Spain international went under the knife in June and has been forced to sit out preseason, but is understood to be recovering faster than expected.
Los Blancos are presently on tour in the United States, where they will next take on Everton in the Guinness International Champions Cup.