The Blues steamrolled Sevilla 4-0 on Wednesday night to finish top of Group E with a game to spare.
Olivier Giroud proved his worth to Frank Lampard by scoring all four goals as he became the competition’s oldest ever player to net a hat-trick.
Chelsea head into the knockout stages full of confidence and have now gone unbeaten in their last 15 matches in all competitions.
Barcelona have secured their place in the round of 16, but Madrid have it all to do on the last matchday as they sit in third in Group B behind Borussia Monchengladbach and Shakhtar Donetsk.
Zinedine Zidane’s side face Gladbach at the Bernabeu next and need a win to progress, or can scrape through with a draw if fourth-placed Inter Milan beat Shakhtar.
Both Madrid and Barca have both been far from their best in La Liga this season, and Hoddle believes Chelsea have a better shot at Champions League glory than the Spanish giants.
‘Looking at the teams that are there, obviously Liverpool and Manchester City, they are going to be there and or thereabouts’ the former Tottenham manager told BT Sport.
‘For City it’s their No.1 priority whether they tell you that or not, they want to win the Champions League.
‘They are two massive clubs but Chelsea’s team is better than theirs.
‘And they have international players who are going to get better as the season goes and if the crowds are full and we are back to full houses – we haven’t seen this Chelsea side inspired by a crowd and the bigger the occasion the better the best players are.
‘There is more to come from Chelsea.’