Chelsea earlier this summer offered ?22million for the playmaker, a bid that was swiftly rejected by Spurs.
Speaking to Sky Sports News, Redknapp said: "I was surprised by the figure. It's a farcical bid. If they're going to make an offer, make an offer, but ?22million for Luka Modric is ridiculous."
But Redknapp would not say what kind of bid might interest Spurs, also rejecting the notion that ?30million would be enough and insisting the player was not for sale.
"We wouldn't put a valuation on him," he said. "He's such a fantastic player, we don't want to sell him. He's up there with the very, very best players in the Premier League and I think he can play in any team in the world, he's that good."
Speculation over Modric's future has come to the fore this summer after Spurs missed out on Champions League football, and Redknapp admitted it would be a challenge to compete financially with the Premier League's top clubs.
"That is the problem," he said. "It's not only Chelsea who would want him, two or three other clubs would be bidding if we made him available.
"But we don't want to lose him. We need to keep our best players, we need to improve our squad, not decimate it by selling our best players.
"There's no reason we can't show the ambition ourselves. I'm not saying we can pay the wages of Manchester City or Chelsea, but we've got a great group of players and if we can add a few more anything could happen."
Redknapp was also asked about the future of Gareth Bale, frequently linked with Inter Milan last season, but insisted the Wales midfielder would also be at White Hart Lane next season.
"Gareth will stay," he said. "He's a great kid, improving and learning the game all the time and he's coming on leaps and bounds since he broke into the team on a regular basis.
"He needs to stay at Tottenham and keep learning."
Earlier, Tottenham midfielder Rafael van der Vaart said he doesn't think Modric's desire to leave White Hart Lane is not down to financial reasons.
The Dutchman said on Sky Sports News: "If someone wants to leave it's difficult to keep them. When a player is unhappy it's not a good thing.
"Luka and (Gareth) Bale don't play for money - they play to win something. If they have to go to another club it's their decision.
"But I hope they stay because they are fantastic and really important for the club."
Meanwhile, Redknapp revealed Villarreal striker Giuseppe Rossi is still a player who interests him.
He said: "I think Rossi is top drawer. He's a clever player, he gets it into feet, holds the ball up and scores goals. He's the Italian centre forward now.
"We tried to get him last year - I think the fee was around ?18million. It looks cheap now."
Asked if the club would be willing to spend ?30million, Redknapp said: "I couldn't say, that's up to the club and Daniel (Levy). But if you're going to buy top players they cost top money. They're not going to be cheap. It costs top wages and big transfer fees. You need miracles if you're going to keep picking players up for bargains.
"Everybody is looking for top strikers and they are at a premium. They are difficult to find."
Source: Team Talk
Source: Team Talk