"Two years ago, he was in the second division and now he will play at Real Madrid," Deschamps told reporters ahead of France's Euro qualifier against Andorra on Tuesday.
"He can play on either side and his development is stunning."
Real Madrid declined to comment.
Mendy would become Real's fourth major signing of the transfer window, after forwards Eden Hazard and Luka Jovic plus defender Eder Militao, as the Spaniards look to rebuild after a disappointing campaign saw them finish without a trophy.
