The Belgian winger joined Los Blancos from the Blues in 2019, but he is yet to replicate the form that made him a household name in European football.
Hazard has had trouble with injuries and there have also been issues regarding his weight, but Cascarino claims this is not new for the winger.
"Eden Hazard is an incredibly gifted player, but he's had a really difficult time since he went to Real Madrid for that huge fee," Cascarino told talkSPORT.
"Injuries and obviously the coronavirus pandemic hasn't helped him, it's affected his career, but what a talent he can be for Belgium.
"He went to Real Madrid to become the best player in the world, he even mentioned that, he talked about that when he joined Madrid, but what a difficult time he's had since he's joined. It's been really hard on him. He's found it tough.
"Obviously injuries have played a huge part in it, he went to Real Madrid and apparently was a tad overweight, he lost his confidence, but he seems to recovered his fitness of late.
"Belgium miss him. I can remember his performance against Brazil in the quarter-finals of the 2018 World Cup, it was him and Neymar both out on the right and Hazard outplayed Neymar all night. He was just superb.
"I really miss seeing Hazard being Hazard, because he is a great player when he's on.
"He has done this a couple of times, he has switched off in his career and Chelsea fans will tell you. There were a couple of times where he just switched off at Chelsea.
"But when he switches on he's up there with the best players who have ever played the game.
"We just haven't seen Hazard at a best for a long time."
