In J.R.R. Tolkien's fictional universe of Arda, Middle-earth is, in fact, Europe. The entire landscape resembles Great Britain, France, Spain, Russia, Germany and Italy. Roughly, the Shire and Imladris are positioned at about the latitude of Oxford, England, Great Britain. Therefore the Old Forest and Bree are positioned roughly about the south-east of England, possibly Norfolk, although this is unconfirmed. Rohan is apparently the name of a famous political family in France, although Tolkien also apparently did this unintentionally and the Rohirrim as well as their culture are definitly gothic and not french.
Arnor could be possible the Holy Roman Empire (Germany in the middleage) as it´s said that this large but in many regions splittered land was once a great empire. Other say, the Mirkwood are like the old germanic forests. The fog mountains are probably the Alps, but going from north to south.
Moving down south, we find that Helm's Deep is possibly in France, Spain or northern Africa, but since the countries are geographical not identical, it´s probably more like the highlands in central or east-central Europe, and therefore Gondor is roughly at the latitude of contemporary Italy, but the land itself seems to be more identical with Germany. This corresponds neatly with history because Gondor and Italy both involve politics and civilization, and also seemed far more civilized than the rest of the world at large, what with Rome being at Italy's center. But still Minas Tirith seems not to have any italian culture, Tolkien only focused on germanic, celtic and a bit finnish culture. That´s why Minas Tirith could be probably also like Vienna, as a bulwark against the ottoman invaders, as Minas Tirith is a bulwark against Mordor and the people of Harad and Khand. Moving east, we discover that Minas Morgul is around the border of France and Italy, and the Black Land itself is positioned right in the center of the Black Sea. This is likely no coincidence, because Black Sea in Elvish would be Morgaer, so we see again that the geography is not the same. Mordor seems to be more like somewhere in the Balkan mountains maybe even in the Caucasus, which would very far away tho.
Moving much further south, we discover that Khand is possibly Middle-East (Syria or Iraq), and Harad is more likely positioned in Africa. Khand itself is possibly the great deserts of Iraq and Babilonia. However, as shown in both The Lord of the Rings: The Return of the King and past history, tribes were discovered to reside in Africa and Khand, but were assumed to be barbarians, because they formed their own civilizations and stuck away from western society. Rhûn is probably positioned in Russia or another countries of the east of Europe. This is very probable since Mordor is ubicated in the modern Black Sea as stated above and Rhûn is on the north of it.
Tolkien spoke gothic, old-english and also visited Germany and observed the translation of the geographical names into Germans himself.
While the legend of king Arthur is about the celtic natives resisting the germanic anglo-saxon settlers, he wanted to create a germanic national epos,
that´s why we find no italian or spanish culture in middle earth, but mostly germanic, celtic and finnish cultures. The dwarfs use even germanic runes.