The former Spurs star believes that the Spanish giants are the team to beat in European club football's elite competition, and is satisfied with his progress at the Blancos
The Spanish champions had to settle for second spot in Group D as Borussia Dortmund proved to be too strong for Madrid, but the Croatia international nonetheless feels that the Blancos are the team to beat in the knockout stages.
"Whoever we draw in the next round it will be a hard tie, but if we play as we can then we will be favourites to advance," Modric told reporters.
"In fact, I think we are the favourites to win the Champions League."
The 27-year-old impressed in Madrid's 4-1 win over Ajax on Tuesday, and he's pleased with the way things are going for him at the Liga champions.
"I have been here three months now and I am used to the rest of the players and the coach's demands. I am happy with my progression."
Modric has made 18 official appearances for Madrid so far this term, scoring once in the progress.