Rakitic's future has come under intense speculation after he was instrumental in Sevilla winning the UEFA Europa League and finishing fifth in La Liga last term.
It is widely expected that the 26-year-old playmaker will move to Barca after playing for Croatia at the FIFA World Cup.
And while admitting he would like to have teamed up with his compatriot in Madrid, Modric has backed Rakitic to be a success at Camp Nou.
"It's clear that if it was me, I would have liked him to sign for Madrid, but in the end it wasn't to be and he's gone to Barca," Modric is quoted as saying by Sport.
"I'm delighted for him. He deserves it. When you go to a big club like Barca, which has a global following, it's an important step in your career.
"Everyone has seen this season what he is able to do. He's a great player who is progressing and I convinced he will be even better next season.
"When you're a Barca player, everything you do has a higher dimension and that is what will happen now with Ivan at the World Cup.
"Sevilla is a great club that comes from winning a European trophy, but Barcelona even more so."
Both Modric and Rakitic are likely to start for Croatia when they take on Brazil in the first game of the World Cup on Thursday.
