He's still very mobile which is why he's still world class at 35. Shows no signs of slowing down, other than looking tired. Understandable though as he's both Croatia's and Madrid's best midfielder when in form, which he has been.
Depends what you understand by 'slowing down'. [MENTION=18429]Morten[/MENTION] is right on this one, broadly.
His level of skill hasn't waned with age. Diet helped him stay mobile and keep that deadly take-on instead of descending into a total turtle that loses the ball a lot, like Marcelo for example.
Biggest issue for me is that standard dilemma you have with his sort - does this have to do with how much he gets to play?
If it does, then it's not really in our benefit to have him be a starter playing 50-75% of minutes. Unless you find a way to play Fede instead of Kroos, which is less ideal as he's better at RCM, it's not clear we're better off with him than moving him on like Cristiano and trying to find the next man, even if short-term we'd be wondering 'why did we do that'?
I maintain I'd like a different player out there permanently. If he can play less, like Marcelo, and still do his thing, it'd be perfect.