Raul believes that Carlo Ancelotti has put together the best Real Madrid side in recent years.
The Blancos legend will be an interested spectator when the Liga leaders travel to Germany on Wednesday to take on another of his former sides, Schalke.
The 36-year-old striker, who spent 16 years at the Santiago Bernabeu and two in Gelsenkirchen, believes the Champions League last-16, first-leg clash will be a tough game for both sides, though he feels that Madrid are as strong as they have been for some time.
"I love both teams,” Raul told Goal. “I spent my best moments as a footballer with them and I really wish them good luck.
"Real Madrid are putting in great performances nowadays and are in their best condition in recent years, but Schalke is a good team and they have proved that by reaching the knockout stages.
“This game will be difficult for both teams.”
However, the former Spain forward feels that Schalke must give "120 per cent" to have a chance of overcoming Madrid's star-studded line-up.
"Cristiano Ronaldo is without question the best player at the moment," Raul told Schalke's official website.
"He is currently experiencing the strongest phase of his career. His achievements and his consistency stand out.
"Xabi Alonso is also extremely important for the team. He is the puppet master in midfield, a kind of conductor. But there are also many other great personalities such as Iker Casillas and Sergio Ramos.
"I believe that Schalke has to play beyond its limits in both games. Each player on the pitch needs to be at 120 percent and play at their full potential. And that little bit of luck of course will help."
He also feels the quality of the competition this season makes it impossible to say with any certainty who will lift the Champions League trophy this year.
"It's very difficult to predict as you saw all of the home teams lost last week," he pointed out. "There are a lot of strong teams; this year needs more effort to win it because it is such a hot contest.”