The reigning La Liga champions are 13 points off the pace of league leaders Barcelona, with Real already dropping more points this season than they did in their entire title-winning campaign.
"Our season is not worthy of a club like Real Madrid. We cannot be happy with the season we are having," Khedira told Sport Bild.
"We haven't been able to find our rhythm since the start of the season, and there's not been a single period in which we've gone on a run away from home, which is where we have dropped so many points.
"This is not how things should be and we cannot be satisfied with ourselves."
Khedira admitted the team's priorities have now changed, with Jose Mourinho's men now targeting the Champions League in a bid to salvage their faltering season.
"In Madrid we have made one objective our priority, which is to win the Champions League," he said.