The experienced coach has little doubt that the former Milan star still has a major role to play at both club and international level.
The 33-year-old midfielder has been struggling to find his best form in the opening weeks of the 2012-13 season, and Croatia legend Zvonimir Boban even suggested that it would be in his best interest to retire from international football.
Nevertheless, Ancelotti, who coached Pirlo at AC Milan, feels it's only normal that the midfielder is going through a difficult period and added his former pupil still has a role to play for Italy.
"Pirlo remains a very important player. Juventus and Italy would be in trouble if he weren't around," Ancelotti was quoted as saying by Tuttosport. "It's only normal that Pirlo is going through a difficult period. Things like that happen with every player. I don't think this is the right moment to make drastic decisions and quit Italy.
"Juventus don't have to worry and can remain calm. You'll see that Pirlo will soon return to his usual efficient best again."
The former Chelsea manager then went on to discuss the similarities between Pirlo and PSG youngster Marco Verratti.
"They are quite similar in terms of personality and both have great vision," Ancelotti said. "There are some differences on a technical level as well, though. Marco is still very young and has been one of the surprises of the season so far. Things could have been more difficult for him in Italy. We tend to expect a lot from youngsters and raise expectations."
Verratti has provided two assists in six Ligue 1 appearances for Paris Saint-Germain so far.