The Portuguese defender believes his compatriot is keen on departing Santiago Bernabeu this summer but insists Cristiano Ronaldo will sign a new deal
The 25-year-old full-back claimed earlier this year that he has never felt wanted in the Spanish capital, prompting rumours he could follow Jose Mourinho to Chelsea or return to his homeland with Benfica.
Carvalho, who recently signed for Monaco, believes his compatriot could well be set to move on from the Liga giants this summer - though he has urged him to stay at the club.
"I think that he wants to move on because he thinks that it would be the best thing for him to do career-wise," the 35-year-old told A Bola.
"Personally, I think he should continue because he meets Madrid’s requirements. He played well in practically every game last season.
"He’s a great left-back, to the point where he even made a few of his critics change their opinion about him. I do think that he has a place at Real Madrid."
Another Portugal star linked with a summer move away from Real Madrid is Cristiano Ronaldo, although Carvalho is confident his compatriot will sign a new deal at the club and placed him above Barcelona's Lionel Messi as the world's finest player.
"Every player who has quit Real Madrid will have regretted it later," Carvalho continued. "Cristiano will renew his contract.
"Cristiano is a winner, he always wants to play and win and that’s why I am in no doubt that he will continue with Madrid.
"Cristiano is a more complete player than Messi and I am not just saying that because I am Portuguese, looking at it objectively, it’s what I think."