He said: "Here he'd line up alongside world champions like (Fabio) Cannavaro, important players like Raul, Guti, (Ruud) Van Nistelrooy, Pepe, (Gabriel) Heinze.
"In this Madrid side the kid wouldn't create any problems. I only see it causing a problem for him."
Schuster hinted the levels of media intrusion in Spain would be different to what he was used to in England, and likened the impact his signing would have to that of David Beckham's arrival from Manchester United in 2003.
"The media explosion (would be a problem)," he explained.
"For the fans this signing would be an amazing explosion similar to what happened here when Beckham arrived.
On the pitch, however, Schuster foresaw no problems with the Portugal ace fitting into his side, and admitted his time in England has helped him to become a better all-round player.
"He's a player who enjoys his football with the group," he said. "The English way has been a perfect education for a player with such exceptional individual talent.
"There he has learned to enjoy his football as a complete professional. This means we would get a Cristiano who would arrive here with his lessons learned."
While Ronaldo has emerged as the undoubted number one target for the nine-times European champions, Schuster revealed the 23-year-old was not the only name on Madrid's wish-list this summer and that Arsenal's Alexander Hleb was also a target.
"Cristiano would help us in a lot of ways, without a doubt, but we can't stop with just him," he explained. "He'll be expensive and we'll have to pay a lot of money, but we need more players because he won't be enough.
"For a few months now we've had a plan and we know what we want, but now Hleb has been added to that plan.
"We didn't know he would be able to leave Arsenal, but now it seems he will.
"There are other players we have been looking at, but everything has slowed down a little due to all this Cristiano Ronaldo business, seeing as he is the big priority for the club."