The coach hopes he can find a place in his line-up for his Spanish attacker to thrive and believes Karim Benzema's concentration has been key to his great form
Seedorf was part of Ancelotti's Champions League-winning AC Milan side a decade ago, while one of his current dilemmas is finding a place for Isco to thrive after a relatively muted first season at the Santiago Bernabeu.
The Italian says he has tried to help Isco adapt to the 4-3-3 system he is favouring with La Liga's leaders and believes the midfielder is edging his way towards the first team.
"We have spoken for a month about how he can adapt," he told reporters. "We haven't been able to play with him in his usual position.
"He played very well against Schalke and Atletico Madrid. He is closer to starting. I had a similar case: Seedorf was an attacking central midfielder who, with sacrifice, played in a different position. Isco can do what Seedorf did."
Ancelotti also praised striker Karim Benzema, who has 11 goals in the 13 games since 2014 began, and he believes the Frenchman found a renewed vigour due to a better focus.
"Benzema is comfortable in the side and with our play," Ancelotti added. "That's the reason. He's concentrating on his work, and this is what pays off."
The former Paris Saint-Germain boss also admitted centre-back Pepe is a doubt to face Levante on Sunday due to a stomach bug which he had in midweek.