Bale is a target for Europe's biggest clubs after returning to his best this season.
Modric said: “Of course Spurs want to keep Bale — he is loved by the fans and it is easy to see why.
“But they must make Champions League football this season if he is to stay. If he decides to leave Spurs then every top club in Europe will want him.
“He is an intelligent guy and is open to new experiences.
“I know he sees the value in playing abroad, so when the time comes he will have a big decision to make. There is not a club in the world that would not want Gareth in their team.
“The way he plays scares defenders — and when he is in full flow there is no stopping him.
“It is not just that he has pace but he has the goals and creates goals to go with it.
“Already he is one of the best players in the world and he will only get better.
“There are some great players in the Premier League but for me Gareth is now the best and most dangerous.”