Modric has been linked with a transfer to Manchester United, and reports have claimed Chelsea are also interested in the 25-year-old.
Redknapp scoffed at the suggestion Modric could leave Tottenham for ?20million, and stressed he would not want to lose the former Dinamo Zagreb player under any circumstance.
Wanted man: Spurs star Luka Modric (left) has been linked with Manchester United and Chelsea
Modric only signed a new six-year contract last year.
Redknapp said: 'I heard some talk about Luka Modric and they were saying (he would cost) ?20m. For Luka? They've got to be dreaming.
'He's such a fantastic player. He's the last person you ever want to see leave your football club. He's irreplaceable.'
Tottenham were hugely impressive as they reached last season's Champions League quarter-finals, but they failed to earn a return to the money-spinning competition after finishing fifth in the Premier League.
Don't make me laugh: Harry Redknapp (right) has dismissed talk of Modric leaving Spurs for ?20m
Rather than considering the sales of the likes of Modric and Gareth Bale, Redknapp is hoping he will get the go-ahead this summer to bring in players capable of steering Tottenham back into the top four next season, to earn a return to Europe's elite ranks.
'We're looking to build a team at Tottenham - not dismantle one,' Redknapp said. 'If we're going to push on as a football club we're going to need to keep those players and we need to add one or two other top players to them if we're looking at having a chance of ever getting back in the Champions League again.
Attracting attention: Spurs are desperate to keep Gareth Bale at White Hart Lane
'We're not looking to sell those players, that would be a massive backward step for the club.'
Welsh winger Bale made a huge impression in Europe particularly, and Redknapp said: 'Gareth's the most amazing young talent in the country.
'There's no way you want to lose him. We've got to hang on to him and Sandro and the other good players we've got.'
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?Explore more:People: Gareth Bale, Harry Redknapp, Luka Modric Places: Europe
Source: Daily Mail
Source: Daily Mail