Tottenham beat off competition from Newcastle for the 22-year-old Dinamo Zagreb ace who cost £16.5million.
But Bilic has reassured fans that the club has not paid over the odds because Modric can become one of the true greats of the game.
"Only Kaka [of AC Milan] is better than Modric," said Bilic. "He's unstoppable, hard even to foul.
"Tottenham is perfect for Luka, better than, for example, Chelsea, who could have bought him, [Lionel] Messi and Robinho and then Luka could have ended up on the bench."
Croatia and Modric kick off their Euro 2008 campaign against Austria in Vienna on Sunday afternoon.