The 71-year-old insisted that the Welshman still loves the Bernabeu outfit. However, he added that the winger's future at the club lies in the hands of Zinedine Zidane.
Speaking to Goal.com, he said:
"He still loves Madrid. He hasn’t problems with the club, it’s a wonderful club. It wouldn’t be a problem [for him to return]. They just have to decide if they need him back, if he can play for Madrid and all these things. I guess you have to ask Mr. Zidane if he wants him, I don’t think so."
Barnett also quashed rumors of Gareth Bale's rift with Jose Mourinho, insisting that the two men have an excellent relationship.
"They have a good relationship, there is no problem. It’s journalists who create the problem, but there is no problem. We expected him to play more; things haven't gone that well, but the team haven’t gone [as] good as well."
Gareth Bale has struggled for playing time since joining Tottenham Hotspur on loan from Real Madrid last summer.
The move represented a return to the club where Bale played his best football, and it was expected that he would rediscover his best form in familiar surroundings.
However, things have not gone to plan for him at the club, with a combination of poor form and injury problems contributing to his dismal run.
The 31-year-old has made only seven Premier League appearances, starting just two of those games.
Does Gareth Bale still have a future at Real Madrid?
Judging by his current form at Tottenham Hotspur, it is highly unlikely that the north London outfit will make his loan deal permanent.
This will see the Wales international return to the Santiago Bernabeu. However, it looks highly unlikely that he will play for Real Madrid.
Zinedine Zidane has stated, in no uncertain terms, that Bale has no future at the club under him, and his stance has not changed in the intervening months.
A lucrative move to the Chinese Super League had been scuppered by Real Madrid at the last minute. However, current financial regulations in the CSL mean that another mega-bid is unlikely.
Options open to Gareth Bale are few and far between, with his high salary representing a major stumbling block.
Nevertheless, it seems both Real Madrid and Bale have given up on making the relationship work, suggesting that the player might not have a future at the club.