The Wales forward enjoyed a dream first season at the Bernabeu after a world record 85.3 million pounds ($122.67 million) move from Tottenham Hotspur in 2013, scoring in the finals of the Champions League and King's Cup as Real won the double.
Bale struggled to kick on during a difficult second term, attracting boos from some supporters and criticism from the media as his club failed to win a major trophy and speculation grew that he was seeking a return to the Premier League.
"Maybe last season I didn't play to anywhere near my potential," he told a news conference ahead of Saturday's 'Clasico' at runaway La Liga leaders Barcelona.
"This season I wanted to improve. It was important for me to keep working hard, to keep fighting, it's difficult playing in a foreign country.
"I've felt more settled, more involved in the team this year and I think that has shown in performances on the pitch. It's good to have a bad season, you really do learn a lot about yourself," added Bale.
"I understand the game a lot more over here and hopefully there is a lot more still to come in the future."
Two separate spells on the sidelines with injury have meant Bale has only started 16 La Liga games this season but he has made his presence felt, scoring 15 goals.
Bale has moved ahead of former Barca striker Gary Lineker as the top-scoring British footballer to have played in La Liga, notching a total of 43 goals in 76 matches.
"I feel like I am playing well, growing and improving all the time," he said. "I'm in good form at the moment.
"Unfortunately injuries happen and you can't do much about it. I feel more comfortable now and I speak a little bit more Spanish.
"When you are happier on the pitch and off the pitch it helps your performances," added Bale.
Real are third in La Liga, one point behind Atletico Madrid and 10 adrift of Barca, with eight matches left this season.
(Editing by Tony Jimenez)
