The 21-year-old has been heavily linked with a move to the Bernabeu this summer with some reports in Spain suggesting a deal has already been agreed.
And Ramos believes the Spain Under-21 international would be major asset for Los Blancos.
"Isco is a great player and anything Madrid does to strengthen with the squad with players of the highest level is always something to be happy about," he told Spanish radio station 'Onda Cero'.
Madrid are yet to confirm the signing officially and Isco remained tight-lipped on the situation after returning from holiday in Ibiza, but told AS: "Playing at Madrid excites me. They are one of the best teams in the world."
Isco was one of Malaga's most influential players in their Champions League campaign last season, scoring three goals and providing three assists as the Andalusians got to the quarter finals of the competition, where they were eliminated by eventual finalists Borussia Dortmund in injury time in the second leg.