Spurs achieved only a draw against 10-man United on Sunday on home soil, the but the Croatian playmaker insists that there is belief still in the dressing room.
Harry Redknapp's side could not break down United, who lost a man when Rafael was sent off 16 minutes from time.
Still in with a shout: The Croatian playmaker is sure that Spurs can be crowned Premier League champions this year
But 25-year-old Modric is sure there will be more surprises in store before the champions are crowned in May and believes that his side are 'on the same level as United'.
'Tottenham still have a chance [of winning the Premier League],' said Modric.
'We are definitely not out of the title race, even though we didn't narrow the gap on United.
'In our last 14 games we've only had one defeat in all competitions. That's excellent for us and we need to keep going.
'Anything is possible. More than anything, we have demonstrated Tottenham can compete with the very best teams.
'Spurs are on the same level as United. And even though we haven't beaten them for 10 years, we showed on Sunday that they are not better than us, we can play with them.'
Talking about the goalless draw at the weekend, Modric said: 'The shame is we didn't win - but even a draw is a good result as it's not only a battle for the title but also a battle to get into the top four.
'Some teams are going to miss out. It's a big competition to reach the Champions League next season. It's not only four teams, it's five or six teams fighting for this fourth place.
'I hope we can achieve that top-four spot again but we need to keep playing like we did against United and we'll see where it takes us.'
On the up: Spurs manager Harry Redknapp has hailed 'amazing' Modric (left) while former Tottenham midfielder Michael Carrick (right), who now plays for Manchester United, believes they are stronger than ever
Manager Redknapp believes Modric's form is central to Spurs' title hopes and said: 'Against United we had the outstanding player on the pitch in Luka Modric.
'He was unbelievable. Magnificent. He's an amazing footballer.
'The little man takes the ball in the tightest areas with people around him, wriggling out of situations. He could play in any team in the world.
'You will play a tight ball in to Luka Modric with someone closing him but you might not play it to some other people for fear of losing the ball and then, bang, it's in the back of your net.'
Redknapp continued: 'We believe we can hold our own with anybody. Tottenham is an improving team. We're in the top five all the time now.
'We're looking to get there and one day win a championship. That is the ambition of the club.'
United's Michael Carrick can certainly see the difference from the club he left to move to Old Trafford almost five years ago and praised Redknapp for getting the most out of his players.
The England midfielder said: 'It is the best Spurs team we've seen for a while. They have certainly improved on years gone by and become a big threat this season.
'Tottenham have some major threats, particularly in wide areas with Gareth Bale and Aaron Lennon on the wings.
'Modric has been in good form, as has Rafael van der Vaart, who has weighed in with a good few goals as well.
'I am not exactly sure what Harry has done to turn things around. Just knowing how to get the best out of his players is a major factor.'
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