The Welshman has become the world's most expensive player following an £85m move from Tottenham Hotspur, but the former Scotland coach said that it does not represent value for money for Los Blancos.
"Bale is not an absolute world-class player," the 66-year-old told Sky Sports News. "I know him and I'm very surprised about this transfer fee.
"Now he has to prove himself.
"I do not think he will make it at Real Madrid."
Vogts played his entire career for Borussia Monchengladbach, while also winning 96 caps for West Germany between 1967 and 1978.