No one doubts Modric's quality; he's one of the best midfielders in the world. However, his advancing age will significantly impact his performance and physical quality, so I believe his contribution is somewhat less than optimal.
There's no definitive proof for AC Milan, but I've seen the arrivals and departures of several players in their squad not make them stronger, so I'm a little pessimistic about AC Milan.
AC Milan needs major changes to compete with some of the other strong teams in Serie A, and they've experienced a decline in performance in recent seasons, making it quite difficult to compete for the title. Modric's quality is unquestionable, as he's one of the best midfielders, but his advancing age will make it somewhat difficult for him to help a new team achieve better results.
I'm also not so confident about AC Milan this season, as several other teams look stronger and more convincing contenders for the Scudetto. The minimum AC Milan needs to pursue is qualifying for the Champions League, as that's a more realistic prospect than competing for the title.