The centre-back believes the Italian is an ideal fit for los Blancos and says he hopes to win silverware in the last season of his professional playing career
The 37-year old was spent seven and a half seasons under the trainer at AC Milan, winning the Champions League together in 2003 and 2007.
The ex-Italy international, who currently plays for Montreal Impact in MLS, believes the pressure that comes with coaching at the Santiago Bernabeu will not be anything out of the ordinary for Ancelotti.
"I think coach Carlo Ancelotti is perfect for a team like Real Madrid," the defender, 37, told Marca.
"No doubt he can handle the pressure in Spain."
The 2006 World Cup winner has spent the last 12 months with Montreal Impact and recently announced he will retire at the end of the current season.
"To win an MLS Cup would be a good way to end my career," he mused. "I really like the family treatment around the organisation. You feel at home and everyone is working together for the club.
"It’s going very well and now I understand the league better. When I arrived, everything was very new. My English is better and I can communicate with my team-mates, coaches, everybody.
"I think [Impact coach] Marco has brought a good mentality to the team, especially in the way in which we play at home. We fight every time we’re on the field and we know we can beat any team in MLS."
The defender also expressed his sympathy towards his former club’s financial situation and stressed that he will always be rooting for the Rossoneri.
"It was difficult to see the Milan and the Serie A’s budget downturn from the outside," he admitted. "Before that, Milan could spend more and that’s a big difference. I’m still watching all the matches in Milan and I will always be a fan."