After 10 years as a regular for Los Blancos, the Portuguese defender departed the Bernabeu in the summer, joining Turkish outfit Besiktas on a free transfer.
Real have struggled this term, currently sitting eight points behind La Liga, while they also trail Tottenham in their Champions League pool.
Although Nacho says he has been impressed by how youngster Jesus Vallejo has performed when called upon, he admits the team has suffered without Pepe's experience.
"I learned so much from Pepe and we miss his experience," Nacho told Cadena Ser. "My honest opinion is we do not need to sign another central defender, you can see Vallejo and Varane have both missed spells through injury.
"Everybody can see there have been changes to the squad from last season and now we are not as experienced, but we cannot yet tell if that will make our situation better or worse."