Reports on Monday suggested that Chelsea are set to increase the initial ?22million they bid for Croatian Modric, who launched a stinging attack on Spurs chairman Daniel Levy on Saturday.
"I've not heard anything," Redknapp told Sky Sports News. "They (Chelsea) are going to make an improved offer? I should think they would need to! ?22million for Luka Modric would be a joke anyway if he was for sale. He's a fantastic footballer. The offer is a joke in terms of how much money they have offered.
"Most importantly we need to keep him, he's a fantastic player for us."
Tottenham fans rejoiced last week when Levy emerged from showdown talks with Modric to insist the midfielder understood he would not be sold this summer despite Chelsea's interest.
Their joy proved to be short-lived however, as Modric gave an interview to a Croatian newspaper on Saturday in which he stated his desire to complete a "dream" move to the Blues.
What hurt the club most was the 25-year-old's personal attack on Levy, who Modric accused of being "arrogant" and reneging on a previous agreement to allow the player to leave if a bigger club came in for him this summer.
Modric also claimed that new Blues boss Andre Villas-Boas was interested in signing him, prompting speculation that Chelsea would return with a higher offer than was lodged when the club did not have a manager last month.
Redknapp admits having Levy and Modric come to loggerheads in such a public fashion has left him in a "difficult situation", but he is still determined to hold on to the player.
"It's up to the chairman, he makes those decisions," Redknapp said.
"I certainly wouldn't want to lose him but it's a difficult situation. He's a fantastic boy, a great player, and it's not easy when people come along and start offering to double or treble your wages, it must make it very difficult for him and I understand where he's coming from a little bit. But I'm desperate to keep him because, as I say, he's so good."
Modric has been in training today as normal ahead of Spurs' pre-season tour to South Africa.
The club still expect the former Dinamo Zagreb player to board the plane for the three-match tour when it leaves on Wednesday and Redknapp has not chosen to punish him for his outburst.
When asked if Modric had been made to train on his own today, Redknapp replied: "Absolutely not a chance. He's certainly not away from the squad. I can't tell you (enough) just what a great guy he is.
"He comes in and trains hard every day. We desperately need to keep him if we're going to push on. We need to add to him or else we are going to fall behind, it's obvious.
"Man City are improving, Chelsea, Man Utd, Liverpool and Arsenal too. We need to improve, not weaken the team."
Despite clearly having his heart set on a transfer to Stamford Bridge, Modric has always maintained that he will not hand in a transfer request.
Modric's representative, Nikki Arthur Vuksan, would not comment on whether his client would go back on that pledge today and would only say: "Everyone has seen the quotes from the story in the Croatian newspaper.
"He gave that interview in his own language so he could say clearly what he has to say.
"There will not be any more public statements from Luka now."
Former Tottenham captain and current club ambassador Gary Mabbutt concedes keeping hold of an unhappy Modric could prove counter-productive.
"Keeping unhappy players at clubs can be disruptive in the dressing room," Mabbutt told talkSPORT.
"No manager will want a player who doesn't want to play for the club, it will only transfer over to the other players."
Source: Team Talk
Source: Team Talk