A 0-0 draw against Greece in Piraeus was enough for Croatia to advance from their play-off 4-1 on aggregate, reaching the World Cup for a fifth time.
Dalic replaced Ante Cacic as coach in early October, leading his team to two wins and a draw on the way to the showpiece event.
Modric, who played a starring role in the first-leg win in Zagreb, said Dalic deserved to lead Croatia in Russia.
"It would be crazy if Dalic wasn't the coach," the Real Madrid midfielder told reporters.
"He did a phenomenal job. I'd also like to thank coach Cacic. We have all done a good job.
"Croatia is above all and most importantly we are at the World Cup."
Croatia were forced into a play-off after finishing second to Iceland in Group I of UEFA qualifying.
The 4-1 first-leg win over Greece sent them on their way to Russia, and Dalic's side sat back and comfortably held out the hosts on Monday.
"The qualifiers were hard, but we are where we belong," Modric said. "We maybe didn't play at the level we know tonight, but the result is most important.
"We were lacking energy and concentration, but we didn't lose the game and we all fought as one.
"We knew the crowd would be crazy, that they would push them forward, but we didn't give them a clear chance."