The European champions take on the Brazilian outfit Gremio in the final in Abu Dhabi on Saturday.
Madrid, led by Zinedine Zidane and boasting the five time Ballon d'or winner Cristiano Ronaldo, are favourites.
Pedro Geromel, the Gremio skipper, admitted his side faced a huge challenge.
"In the last 10 years, Ronaldo has either won the Ballon d'or or been second behind Lionel Messi," he commented. "That shows he has maintained a high level."
The 32-year-old Portugal international will go into the showdown at the Zayed Sports City Stadium aiming for another personal achievement: to increase his tally as the highest goalscorer in the history of the competition.
Ronaldo's equaliser against Al Jazira in the semi-final on 13 December took him to six goals - one clear of Messi and Luis Suarez.
Bale continues recovery
Gareth Bale scored Madrid's winner against Al Jazira shortly after replacing Karim Benzema. The 28-year-old Wales international is unlikely to start the final as he continues his recovery after a three-month injury absence.
"It was good to score," Bale told Real Madrid TV. "The most important thing was to win and get into the final. I mustn't rush back. I've got to be patient because I've had some problems and I've got to take my time."
That Zidane was able to substitiute a misfiring Benzema with Bale's 100-million euros-worth of talent underscores the difficulty facing Gremio, said Geromel.
"It's not just Cristiano Ronaldo," he added. "The rest of the Real Madrid team are great players but at the same tiime, they're not superhumans."
Everton Sousa Soares scored in extra-time in the semi-final to give Gremio the spoils against Pachuca, the Concacaf Champions League winners.
Gremio, who claimed the 2017 Copa Libertadores, have never competed in the Club World Cup while Madrid are seeking their third title after triumphs in 2014 and 2016.
"We'll obviously have to keep an eye on Ronaldo and make sure he can't get into his favourite positions," he commented. "But the problem with Madrid is that they've got such a gifted team. Any one of their players can cut through you."
Victory on Saturday night in the would give Zidane his eighth trophy as Madrid manager. Since taking over from Carlo Ancelotti in January 2016, the 45-year-old Frenchman has steered the side to two Champions League titles, two Uefa Supercups, one Spanish Supercups, one La Liga championhip and the 2016 Club World Cup.