Tottenham manager Harry Redknapp has enjoyed a memorable record against his former club since leaving Upton Park and extended his unbeaten run to ten games.
After dropping two points against Fulham on Saturday, the north London club managed to get back on the winning trail and keep alive their hopes of reaching the Champions League next season.
Modric was starting his first game for the club since August, but made a dream start when he scored the first goal before Defoe secured the three points with the second against his former club.
Despite moving out of the bottom three following their Boxing Day victory over Portsmouth, West Ham will be looking anxiously over their shoulders and will be praying they can hold onto their star players in January.
Tottenham got off to a dream start when they opened the scoring on 11 minutes.
Aaron Lennon burst away down the right and saw his cross deflect off James Tomkins straight into the path of Modric who fired his shot into the ground, the ball flying past Robert Green on its way into the corner of the net.
West Ham's misery continued as they were forced to make a double change inside the opening 20 minutes.
Influential midfielder Scott Parker was the first to leave the field with a hamstring injury and then, a few minutes later, Herita Ilunga followed him down the tunnel with the same problem.
Gianfranco Zola was forced to shuffle his team around with Luis Jimenez partnering Guillermo Franco in the Hammers attack and Valon Behrami moving into the centre of midfield to play alongside Radoslav Kovac.
Despite the changes, it was West Ham that almost grabbed an equaliser on 25 minutes when Jack Collison held off the challenge of two Tottenham defenders before firing in a low shot which forced Heurelho Gomes to make a fine save diving low to his right.
Tom Huddlestone nearly added a second for the home side on 29 minutes. Benoit Assou-Ekotto played the ball into the path of the Tottenham midfielder who broke free only to drag his shot wide of the goal.
The home side continued to create the best openings and went close again in the 55th minute when Huddlestone fired in a low shot which cannoned back off the post before Modric fired the rebound over the bar.
But the home side secured all three points when they added a second goal on 81 minutes. Defoe saw his first shot parried by Green but the rebound fell to the Tottenham striker and he made no mistake as he struck an unstoppable shot past the West Ham keeper and into the roof of the net.