Real madrid is quite aware of Luca modric age and would probably not expect much from him as it was in the previous season. Modric already offered to Madrid all he could and I think Madrid is trying to reciprocate the good gesture by giving him the captain role. Luca even before now has been displaying leadership qualities in that squad and I believe he can do more better as a captain. Some of these young players need someone who’s capable of putting the squad together in and out of the pitch. They will surely listen and respect him as the senior player he is and as the legend.
Only he remains at Real Madrid as a veteran player besides Carvajal, at the age of 38 Real Madrid still gave him a contract even though at his age he should have returned to play for his first club (Dinamo Zagreb) or at least go to the SPL. Both sides show their loyalty to each other, with Modric at Real Madrid, it's hoped that the young players there can learn more from him.
BTW, have you heard about Los Galacticos 3.0? they say that Real Madrid is currently the third golden generation after the Zidane era, the BBC era.