Bellingham is returning to Germany for the first time since leaving Borussia Dortmund for the Spanish capital in the summer, having emerged as one of the biggest stars in world football
The Englishman is LaLiga's top scorer this season with 12 goals, but the Croatian coach was well aware of all of Real's midfield threats.
"He's one of the best players in the world right now. He's playing at the absolute top level" Bjelica said of Bellingham.
"We respect him and we respect every player from Real Madrid. But for me as a Croatian, Luka Modric is still the best in the world.
"Bellingham is one of the biggest, he's in top form, he scores goals, he's a difference maker and is difficult to defend. It'll be a big job for us to keep him under control tomorrow."
Real winger Lucas Vazquez praised his teammate's impact but said it was "too early to compare him" with some of the greats to pull on the famous white shirt.
"What a player... His start is impressive. We want to help him continue on that path for many years.
"Hopefully he can come close to what Karim (Benzema) and Cristiano (Ronaldo) did."
Real manager Carlo Ancelotti said Bellingham could still get better, telling reporters "can improve his quality when he doesn't have the ball".
Bjelica, a former midfielder, played nine games for Croatia in a career which took him to Spain, Germany and Austria.
The 52-year-old started his coaching career in 2008 and became manager of Union Berlin in November.
On Saturday, Union won beat Borussia Moenchengladbach at home 3-1, their first win in any competition since August.
Bjelica said Union "have a chance" against the 14-time Champions League winners, but need to "deliver a perfect game".
Ancelotti praised Bjelica, saying "Union have changed their coach and system. Now they're more offensive and it will be an even match."
