Kovac sees steady improvement at Dortmund ahead of Lille clash

DORTMUND, Germany, March 3 (Reuters) - Borussia Dortmund coach Niko Kovac knows his side are still a work in progress but sees signs of improvement as they prepare for a tough Champions League Round of 16 first-leg clash at home to Lille on Tuesday.

The 53-year-old took over at the end of January after Nuri Sahin was sacked, with Kovac guiding Dortmund past Sporting in the Champions League knockout phase playoffs.

Kovac acknowledged the challenge of reviving Dortmund, with last season's Champions League finalists sitting 10th in the Bundesliga, six points off the top four and at risk of failing to secure European qualification for next season.

"We have become more settled, we work hard every day on the training ground and in the meeting room. We are still far from where we want to be. But the way the boys are going along with it pleases me," Kovac told reporters.

He added that Lille would be formidable opponents. "They play a very versatile brand of football. This will demand a lot of strength and concentration from us," said Kovac.

"They didn't make it into the top eight (of the Champions League table) for nothing and have, for example, beaten Real Madrid. It's going to be a tough nut to crack."

The two teams have only met once before in European competition, with Dortmund winning on away goals in a two-legged UEFA Cup last-16 tie in 2002.

Dortmund have lost only one of their last 16 home games in the Champions League and Kovac believes the passionate support at Signal Iduna Park will be a key advantage for his team.

"Our stadium, it's a big castle. It's tough to play here -- very tricky and very hard. I hope we can use the atmosphere to make an impression on Lille." (Reporting by Tommy Lund in Gdansk; Editing by Ken Ferris)