Modric was at the centre of a summer-long fight between Spurs and Chelsea, with the Blues making at least three unsuccessful bids for the playmaker - the last reported to be £40million.
Modric made it clear that he wanted to move to Stamford Bridge, and refused to play in the club's game against Manchester United, claiming he was not psychologically ready to play after months of uncertainty about his future.
The Croatian has knuckled down since the transfer window shut, however, putting in a series of impressive performances to help Spurs put together the four-match winning streak which has seen them turn their season around after a dismal start.
Like Modric, Manchester City striker Carlos Tevez wanted to leave his club this summer, but he was also denied a move after talks with Brazilian side Corinthians fell through.
Tevez's relationship with his club has deteriorated rapidly since, with the low point coming two weeks ago when he allegedly refused to come off the bench to play for City in their Champions League defeat at Bayern Munich.
Redknapp thinks Modric would never resort to such tactics, but admits that if he did, he would almost certainly have had to sanction the midfielder's sale.
"It couldn't have gone that way with Luka. He wouldn't refuse to come on the pitch or do anything like that," Redknapp said.
"He wouldn't dream of coming in and disrupting training. If he had have done he may well have got away. If he had been a nasty person and been disruptive he may well have got his move. In the end I might have said to the chairman 'This can't go on, we don't need it'.
"The more disruptive players are, sometimes it forces it (a move).
"You spend half your time looking at them, who else they're dragging down with them. He has close friends here. If he'd wanted to be a nuisance I am sure he could have been, but it's just not in his nature, he's not that type of lad."
The difference between the atmosphere around the club before and after the transfer window shut is startling.
After two big defeats, the second of which was a 5-1 home hammering to Manchester City, Redknapp admitted the Modric saga had a left a dark cloud hanging over the club, and called on the Croatian to draw a line under the matter and give his all.
Since then, with Modric's help, and the impressive form of new signings Scott Parker and Emmanuel Adebayor, Spurs have climbed to sixth in the table after their recent run, which included wins over top-four rivals Arsenal and Liverpool.
That has left Redknapp admitting the squad he now has is the best since he took over three years ago.
"I do think that this team potentially could be the best I've had here," Redknapp said.
"It's a good group of players. Scott and Emmanuel have come in and they have been a big influence on us this year. Kyle Walker is emerging as a top-class right-back as well so we're looking stronger."
Jermain Defoe has played a big part in the turnaround in Spurs' fortunes, scoring four goals after striking up a good partnership with Adebayor.
With Wayne Rooney now unavailable for England's group stage games thanks to his three-match suspension, Redknapp thinks Defoe could be the man to replace the Manchester United marksman in Fabio Capello's starting XI.
"It's up to Jermain to have a great season and push himself," said Redknapp, whose team faces Newcastle on Sunday at St James' Park.
"It's wide open with England now. I think we will only play with one striker, with Gerrard behind somebody.
"You would take Jermain and Gerrard together all day long."
Adebayor faces a test on a hamstring injury before Sunday's match and Redknapp revealed today that Niko Kranjcar looks set for an extended spell on the sidelines after tearing a thigh muscle while on international duty with Croatia.
"Niko has torn a thigh muscle quite badly, he is definitely not fit," Redknapp said.