The coach was part of the AC Milan team which won two European Cups in a row and now plans on making the Spanish giant the first to win two consecutive Champions League titles.
Carlo Ancelotti believes the confidence generated by Real Madrid's Champions League win can propel it to retaining the title this season.
No team has ever defended the Champions League since the competition was revamped in the early 1990s, with AC Milan the last club to win back-to-back European Cups in 1989 and 1990.
In what could turn out to be a quirky twist of fate, Ancelotti was part of that Milan side and is now aiming to create history in charge of Real, which defeated city rival Atletico Madrid 4-1 in the Lisbon showpiece in May.
"No team has defended the title in history," Ancelotti told the club's official website. "We know it will be very difficult.
"Our starting point resides in the fact that the team is more confident in itself. It is more confident now thanks to recent success.
"I think that gives us something extra for this season's Champions League."
Real's 2014-15 campaign gets under way with a Super Cup showdown against Europa League holder Sevilla in Cardiff on Tuesday.
It has been a busy close-season at Sevilla, with captain Ivan Rakitic leaving for Barcelona and a raft of new signings arriving.
On Sevilla, Ancelotti added: "The team had a good season.
"It won the Europa League with a group of players who worked well as a team and they deserved to win the title.
"Sevilla has changed a bit this year.
"In some ways it is an unknown side at the moment because they have lost some important players and others have arrived. We'll see what happens."