There was an element of comedy to the fourth-minute equalizer for Mario Mandzukic as Denmark's early advantage quickly disappeared.
Jonas Knudsen - 5 - The Ipswich defender's long throws caused a number of problems for the Croatian defence, but that was about the only effective final product he produced for his side.
90 minutes:Attempts fail as the match heads into extra time.
Modric's spot kick was weak, though, and Schmeichel dived to his left to smother it for the first of his three penalty saves.
They too are seeking to match their 1998 achievement when they reached the quarter-finals before being beaten by Brazil in what was their best World Cup showing.
The largely disappointing Croatians had to rely on a penalty shootout to see off a Denmark side which had, for the majority of the 120 minutes, been the better team.
'He's a wonderful player but they have other skilful players and we need to handle him collectively, ' he added. In team news, Yussuf Poulsen is likely to return to the side after serving his suspension against France.
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That left Croatia on the brink of winning it - and Rakitic obliged, rolling his penalty into the corner to spark huge celebrations.
Croatia captain Luka Modric, who took the saved spot kick in injury time, managed to convert in the shootout. "The fact they have gone 18 games unbeaten speaks volumes", he said.
"I think today we had the opportunity". He's the most important player for Denmark.
Hareide made his remarks at a press conference ahead of Sunday's last-16 match against Croatia, reports Efe.
Croatia's forward Mario Mandzukic celebrates after scoring the team's first goal against Denmark during the World Cup round of 16 football match.
But he is confident of an improvement against Russian Federation to give Spain its first win against either a World Cup or European Championship host at the ninth attempt.
Modric stepped up but side-footed weakly and Schmeichel made the first of his three penalty saves on the night, all in vain, as his legendary goalkeeping father Peter punched the air in delight as he watched on in the stands. But Croatia have just enough artillery in their skill set to cross Denmark's hurdle but they might have to grind it out to achieve the desired result.
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