The Spanish giants were thrashed 4-0 by PSG in the semi-finals of the Club World Cup earlier this week and the former Real player believes that the new coach will have to get his side working more cohesively after they ended last season without silverware.
Bale told ESPN: "I think if you look off what he did at (Bayer) Leverkusen, yes, and now he's arguably got better players to work with and I imagine a bigger transfer kitty.
"So I would like to think Xabi has got the respect of the players and the players will play for him. So I expect big changes and I expect them to play the way he wants them and if they don't, I don't think Xabi's scared to drop anyone."
Real's loss to PSG has placed further scrutiny on Kylian Mbappe and Bale explained that winning trophies is the only way the French forward can win over Los Blancos fans.
The former Wales international said: "It's a difficult one because he's still scoring the goals, he's still doing good things, it's just they haven't won anything this season. I think at Real Madrid you're expected to win everything, so it's a tough one because he's still delivering on the pitch, but maybe he's not having those moments.
"So I guess it's now up to Xabi to find that blend of pressing and trying to get the best out of him and saving his energy for when you need him. So yeah, it's going to be a tough one. I wouldn't like to criticise him and say he's had a bad season because of the goals and everything.
"But yeah, being his name, what you're expecting him to do, of course everyone's going to always expect more."