On Saturday when Modric decided to go to the media for the second time in the space of a month to declare that he wanted to complete a "dream" move to Chelsea, who had a £22million bid for the Croatian rejected last month.
"At the end of the day it's up to the chairman, he makes those decisions. I certainly wouldn't want to lose him but it's a difficult situation," Redknapp told Sky Sports News.
"He's a fantastic boy, a great player, and it's not easy when people come along and start offering to double or treble your wages, it must make it very difficult for him and I understand where he's coming from a little bit."
Spurs chairman Daniel Levy has vowed that none of the club's top players will be sold this summer, but his hardball stance will be tested to the limit if Chelsea come back with a much bigger offer for the playmaker with reports on Monday night claiming they had upped it to around £27million.
The announcement of Michael Essien's serious knee injury, and the poor form of the Blues' other midfielders last term certainly makes a move for Modric look likely.
Modric rightly earned rave reviews for his performances at the heart of the Tottenham midfield last season and Redknapp knows keeping hold of the former Dinamo Zagreb man will be key to the club's chances of clinching the top-four space that eluded them last year.
"I'm desperate to keep him because he's so good," Redknapp added. "He's a fantastic footballer. The (£22million) offer is a joke in terms of how much money they have offered.
"Most importantly we need to keep him, he's a fantastic player for us."
When asked if he was aware of a new bid from Chelsea, Redknapp said: "They (Chelsea) are going to make an improved offer? I should think they would need to! I've not heard anything."
Source: PA
Source: PA