Ahead of the European Championships, Cruz has the chance to win the Champions League for the fifth time with Real when they face Borussia Dortmund at Wembley on June 1.
He also won the Champions League with Bayern Munich before joining the Spanish giants.
Cruz joined Real in 2014 and soon formed a strong midfield partnership with Luka Modric.
In a statement on their website, Real said that Kroos “will be remembered in the history of Real Madrid as one of the greatest legends of our club and international football”.