For Luka modric to join AC Milan is really a smart move and indeed a big plus, yes we all know age is really really cougth up with Luke modric but deep down he's still have much to offer, and judging from AC Milan present form now they really kind of need an experience players like Luka modric, maybe in that midfield and some other good ones he can still do more, besides it's rare for someone at his age to have still go to a top team in Europe, the only reason is they know his potential and what exactly he can do and I believe he won't disappoint, because Luka modric is one of the gems we have in football and age won't be a barrier.
In terms of strength, Milan will not get the best from Luka Modric because he is gradually passing his prime. But you cannot take away his experience and leadership skills from him. He would be a good mentor to young players in the club and they will learn a lot from from him. AC Milan is going through a transformation stage. They ended last season in eight position which means they will only focus on domestic competitions.
Yes. Milan's advantage next season is that they can focus solely on domestic competition, giving them the opportunity to compete with other teams for trophies because they don't have a busy schedule. Modric's presence will certainly help the rhythm of Milan's midfield, and it's a smart move by Milan management to bring in Modric, who we know can still contribute significantly to the team and is physically very strong.
Remember last season, when Modric played the full 90 minutes for Real Madrid, he was still strong. There were even reports circulating after that match that he was suspected of using doping, but after testing, he was found to be unaffected. This proves he's still strong enough to play another season or two in a competitive league. If Allegri can combine young players with senior players, Milan will be even better this season than last.