Barca completed the domestic Treble last season leaving Real Madrid trophyless for the campaign.
With Xabi replacing new Brazil coach Carlo Ancelotti at Real Madrid, Deco expects their eternal rivals to improve next season.
He told BBC Sport: "Next season is not going to be easy, because I know that first Real Madrid has a lot of top players.
"In my opinion they have a big team. They have a lot of fantastic players. Of course they want to improve.
"It's very important to have a strong Madrid. It's very important to have strong players, top players, players that the people want to see. I think Madrid has these kinds of players, like us.
"Now it's important to keep the top players in La Liga. So for us it's important that Madrid are strong, that Atletico is strong, and we need to be there."
We don't need many players
Deco was also again asked about Barca's interest in Manchester United attacker Marcus Rashford and Liverpool's Luis Diaz.
He added, "We have been focusing on renewing contracts, after that, we'll discuss players to come.
"Of course, these two players, like you mentioned, they are good but have contracts in their clubs, so we won't speak because it's not fair. But when you decide to go to the market, for sure, we find some names. In my opinion, we don't need to bring many players."