Real were thumped 5-2 in Jeddah, despite Barca having goalkeeper Wojcieh Szczesny sent off on 55 minutes.
Modric said afterwards: “It's a hard one to take. We have to stick together, be a team and react the same as we did after losing to them in LaLiga. We showed a reaction and I hope we will react to this tough defeat, because we didn't think we would lose like this.
"It's good that the cup game is coming up soon and we won't have much time for regrets. If we have to choose a final to lose, we prefer to lose this one.
“This is football, we feel sorry for our fans and for ourselves but we have to keep going and stick together. There's a lot of football left this season and we want to give our fans a lot of joy. We didn’t give a good account of ourselves, Barcelona were better and we have to congratulate them. We have to recoup our rhythm because we were in good form in the league."
He added, “In football, there are defeats and victories, you can't always win. It's never nice to lose against this rival, but this is football. We have to congratulate Barcelona, they played a better game. We have to work and correct today’s mistakes and get back at it."