Reacting to Saturday's impressive win against Villarreal, Valdano can see a surge in confidence from the Real players not recognised under Xabi.
Valdano said on Radio Marca: "What's going on? I think Arbeloa is doing a great job building his players' confidence. The motivation they showed against Villarreal was tremendous.
"They were completely connected throughout the match, from minute 1 to 90. That's something that didn't happen with Xabi Alonso.
"With Xabi, they would leave the locker room with their lesson well learned. For 20 or 25 minutes it seemed that the players were responding to the coach's orders, and then the team would start to fall apart, get distracted, break down... and end up playing poor matches.
"The match against Villarreal was very rich. It's true that they won again thanks to the goals of the best striker in the world (Kylian Mbappé), but they didn't need the best goalkeeper in the world (Thibaut Courtois) to win. Real Madrid were very disciplined and are doing a great job building the players' confidence."
Valdano added: "Is there more commitment with Arbeloa? The players are more comfortable. I don't know what happened with Xabi Alonso, but something did happen. I think Arbeloa is understanding what happened and is correcting it."