The Russia boss believes Carlo Ancelotti's all-star squad will deliver glory in Spain and Europe but is delighted to see Atletico Madrid emerge as contenders
The capital club are currently third in the Primera Division table, behind leaders Barca and city rivals Atletico Madrid.
However, the veteran Italian believes los Blancos have the edge in the title race, but is delighted to see Diego Simeone's men challenge the established order.
"Real are favourites to win La Liga and a 10th European Cup," he told Marca.
"The squad is extraordinary. The change of coach at Barcelona has brought something different. The team plays faster, just as attacking football and scores a lot of goals, but it is still developing.
"It makes me happy to see three teams fighting for the title. Atletico have joined in and it's not just a fight between Real and Barca."
Madrid, who are three points behind Atletico and Barca, travel to Betis on Saturday.