Benitez said: 'Steven will be in the squad. He was okay in training this morning. It was a special training session, so we weren't testing him 100 per cent, but he trained okay so we will see.'
The news will be a welcome boost to the Spaniard, who had targeted the Madrid game as Gerrard's likely comeback when the England international limped off in the Feb 4 FA Cup defeat to Everton.
Gerrard has responded well to treatment and was thought to be close to a return for yesterday's disappointing 1-1 draw at home with Manchester City. Benitez, though, was unwilling to risk his midfielder talisman, knowing all too well the dangers of rushing players back.
Fernando Torres has suffered two recurrences of a hamstring injury this season and Benitez did not want Gerrard to break down again with the all-important trip to Madrid on the horizon.
Liverpool's opponents have been in fine form since appointing the former Tottenham manager Juande Ramos to replace Bernd Schuster. On Saturday, first half goals from Sergio Ramos, Gonzalo Higuain and two each from Raul and Klaas-Jan Huntelaar gave the Bernabeu side a stunning 6-1 victory over Real Betis as they warmed up for Wednesday's game.
Real have identified the Champions League as their priority this season after falling behind to Barcelona in the league. But the news of Gerrard's return will hand the initiative back to Benitez's side.
Gerrard is widely regarded in Spain as the man who makes Liverpool tick and, while Benitez has yet to confirm he will start in the Bernabeu, his presence is likely to worry Ramos's side, who remain fragile in defence.