The Wales international suggested after Los Blancos' third successive Champions League success last month that he could be on his way out of the Bernabeu before the start of next season.
Bale is reportedly wanted by the likes of Chelsea, Liverpool, Manchester City and Manchester United, with the latter a more realistic destination.
Former Tottenham Hotspur teammate Defoe believes that the time is right for the 28-year-old to return to English football, having won every trophy possible during his five seasons in the Spanish capital.
"I would love to see him back in the Premier League, I think everyone would be excited about that," he told Sky Sports News. "He has been linked with everyone. There is talk about him staying in Madrid, I've seen Chelsea, Liverpool and Man United. More United than any other club but I've even seen [Man] City.
"The Premier League suits him. If he came back there would be a massive buzz. Coming back after what he has achieved at Madrid and bringing that experience to another big club and to the players there, I think it would be massive. He needs to play.
"It was interesting from his interview after the Champions League final, I have never seen him like that. It was almost out of character, he normally keeps things close to his chest and doesn't say how he feels.
"He is a nice boy who usually gets his head down and plays. It was almost like he has had enough. He has said he needs to play football. I can imagine when he said that, all the top managers and chairmen would have been like: 'OK, bang, who is his agent?'"