Modric missed Monday night's 3-0 defeat at Manchester United after informing Redknapp he was not in the right frame of mind to play at Old Trafford. The Croatia midfielder was told by Levy at a summer meeting he would not be sold under any circumstances, but Redknapp believes clear-the-air talks are required, with a new contract to follow.
"The chairman has to sit down and have a chat with him," said the Spurs manager. "They probably fell out a little bit over that first meeting. If they can have a meeting and resolve the whole situation and Daniel tells him we need him, he is important and that we are ambitious and will bring one or two players in, you might find the boy will be okay."
He added: "The chairman has also said he will look at his contract in a month or two. He told me he would do that."
If Modric is not allowed to go, Redknapp knows he may have some reassurance of his own to deliver.
However, the Spurs chief is confident he can pick the player up once the August 31 deadline has passed.
"If anyone can pick him up, I can," said Redknapp. "I have a great relationship with him. People have to understand it is not an easy situation.
"If someone offered to treble anyone's wages, they would find it difficult, wherever they worked. That is the situation the boy is in.
"If someone offers ?£150,000 a week rather than ?£50,000, you are going to have your head turned. Some players can handle it. I know players who have caused havoc in the dressing room in order to get a move. I have seen it so many times.
"But he wouldn't cause anyone a problem. Let's be truthful. He wanted to go, but he has just got confused with it all."
Source: PA
Source: PA