It's going to be fifty-fifty in my opinion.
Modric might get his contract extended but he might not. He is one of Madrid's greatest midfielders and deserves to be aligned with other legends especially with his loyalty to Madrid which has been more than a decade I think he deserves the status of a Madrid legend but in this case the age aspect must also be considered because Modric is no longer young. Not that Madrid is selfish not to extend the contract of Modric but of course in this case we must realize that competition is very important. In the end it will be the same as when Marcelo was let go or Sergio and maybe looking further is Raul who was let go.
They will still be legends but that doesn't mean they have to stay at Madrid forever because performance must also be seen even though Modric is still useful but next season Modric will be much older.
For me, I hope Real Madrid continues to extend Modric's contract. But even though he is currently not healthy enough to play until the end of the match. Now, he alone can guide young players at Real Madrid. They have excellent rookies but need more bravery to face strong clubs. Real Madrid will have a confused squad when meeting those opponents. Modric will be a source of direction for young rookies to shine freely.
As for Modric, I will ask him to retire from the national team, and I need him to devote all his heart and strength to Real Madrid.
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Real Madrid have started to focus on recruiting young midfielders like Modric in recent seasons, and it is certainly intended to replace Modric as he continues to age. As I said before, it will be a 50/50 chance whether he will get a new contract extension or not. We have also seen several players who have always gotten the main place slowly released by Real Madrid, one of which is due to the age factor. Interestingly, they also have a good new midfielder in Jude Bellingham, a player they just signed this season.
This is part of regeneration and it must be done and they are very smart because they regenerate when their mainstay players are still in the squad.