The winger's set to return being restricted to watching from the sidelines while the coach also suggested Madrid are better with Jese in the first team
Bale has missed the Blancos' last three matches in all competitions, including the club's 3-0 win over Atletico Madrid in the Copa del Rey semi-final first leg on Wednesday.
But the 54-year-old declared the Wales international to be fit to return to the field at the Santiago Bernabeu this weekend after being rested in midweek to ensure a full recovery.
"Bale will start, he is in good physical condition and can play a good game," stated Ancelotti in Friday's pre-match press conference.
"I always tell the truth about these things - when it might not happen I say nothing. When I say Bale is good, Bale is good.
"When I say that Bale didn't play on Wednesday to prevent an injury relapse, that's the truth. He preferred to be ready for the weekend game, which means he didn't have a relapse before Wednesday's game."
The Welshman's return will be a big boost for Ancelotti, who must prepare for three games without Ballon d'Or winner Cristiano Ronaldo after failing with their appeal against his sending off at Athletic Bilbao last Sunday.
In Bale's absence, 20-year-old Jese Rodriguez has impressed - scoring four times in his five starts in 2014 - and the Italian trainer suggested that his team are better with the Spain Under-21 star included.
Ancelotti explained: "I am very happy with the work Jese is doing. He has grown a lot in a short space of time.
"He's confident but you've got to be aware that he's young. It's his first season in the first team. Everything is good with him though. He has a good mentality and we have to be careful with him.
"All of the players are happy playing alongside Jese. With him we are stronger. It may be that at the beginning of the season no one thought he could help us but I think he is doing very well. Everyone is happy, including Bale."
If Jese is still in fantastic form once Ronaldo returns from his ban, Ancelotti will have a tricky dilemma on his hands about whether to start the Spaniard or Bale on the right wing in his favoured 4-3-3 formation.