Diaz was presented to local media by Real Madrid on Monday.
“I'm sad to see Brahim go but he wants opportunities, so good luck to him," said Foden, who started and scored his first home senior goal in Sunday's FA Cup thrashing of Rotherham.
“He will do well, I know it. I grew up with him and know his qualities, so I know he'll do well. Maybe one day I'll face him in the Champions League.
“But it shows the strength of the squad we have here, how good the players are – it is difficult to get in, but we all try our best."