The 41-year-old spent five years at the Santiago Bernabeu between 2000 and 2005 and believes the situation involving the club captain and the exiting Jose Mourinho could have been handled better.
"The issue is complicated with Iker. At the end of the day, these are very delicate things that probably should have been treated in a more professional way, for many reasons," he told reporters.
"There are no benefits in a situation like this for the image of the club. Understandings between players and coaches are very difficult on a club, it has not been a good year for Madrid. Things should be re-started next year."
He also commented on one of his former clubs, Real Zaragoza stating he hopes the club can find a way to stay afloat in La Liga this campaign.
"I don't even mind if they manage to secure survival at the last minute, I just hope that they will be saved," Cesar added.
Sanchez made 20 league appearances for Madrid and was capped once by the Spain national team.