The Italian coach is pleased with the defender's contribution in recent months and also praised Jese Rodriguez following his impressive rise up the ranks at the Bernabeu
Los Galacticos are unbeaten in all competitions in 2014 and have kept an incredible 13 clean sheets in 16 games this calendar year.
Spain international Ramos went through a difficult period in the closing months of 2013, but Ancelotti is pleased to see the 27-year-old back to his usual best again.
"The squad is very able in carrying out defensive work. And we’re seeing the real Sergio Ramos now, not the player from November or December," the Italian told Canal Plus.
"You can quickly fix any mistakes and we’ve done that, not just by changing our system but also because the players now understand how important it is to recover possession.
"Defensive and offensive balance is the most important thing in football. Defensive work doesn’t require creativity or skill."
Ancelotti then went on to discuss the development of 21-year-old Jese Rodriguez, and lauded the promising Spanish forward's progress this term.
"Jese is scoring goals and setting up his team-mates," he added. We’re very lucky to have him here. He is a very focused player and he works hard.
"Could Jese go to the World Cup? Well, it was a big surprise when Paolo Rossi was called for Italy in 1982, so who knows?"