The Blancos head coach believes the Frenchman's experience is invaluable and the work he is doing with players in the squad is paying off.
Zidane became Madrid's No.2 following Ancelotti's appointment last summer, and the Italian believes the work 'Zizou' is putting in with players like Karim Benzema, Alvaro Morata and Jese is bearing fruit.
“Zidane is important for me,” Ancelotti said during a Friday press conference ahead of Saturday's visit of Granada. “His work with Benzema, Morata and Jese is paying off.”
Under Ancelotti, Los Blancos have won eight straight matches in all competitions and remain unbeaten since the 2-1 loss to rival Barcelona in October.
Madrid has yet to concede in six matches this month – something the head coach believes is deserving of much praise, and evenly jokingly suggested that he was due some credit.
“The team is playing well for many reasons. You could even say the coach is doing a good job," Ancelotti said.
With joint leaders Barcelona and Atletico Madrid not in action until Sunday, three points against Granada will put Madrid top at least on a temporary basis.
“We could be leaders for just one night but it's an important game for us anyway," he said.
Ancelotti refused to speculate on what impact Sandro Rosell's decision to resign as Barcelona president might have on the club.
He added: "I don't think about what's going on at Barcelona. I'm only focused on my team.”