After winning the Bundesliga in his first campaign in charge, Ancelotti has endured a difficult start to 2017-18.
They exited the Champions League at the hands of eventual winners Real Madrid in the quarter-finals last term, having not won the competition since 2012-13.
And, speaking ahead of Bayern's crunch Group B clash with fellow heavyweights Paris Saint-Germain, Ballack offered a reminder that the success or failure of the Italian coach's tenure will be determined in Europe.
"Bayern are looking [to win] the Champions League. Ancelotti has to be measured by this," he was quoted as saying by Die Welt .
According to Ballack, a further challenge for Ancelotti and Bayern will be managing the impending departure or retirement of long-serving forwards Franck Ribery and Arjen Robben, who are 34 and 33 respectively.
"It's very important how the club and the coach communicate with them in this matter," he said.
"Franck and Arjen are absolute world class players in the autumn of their career. And dealing with such things can be difficult, the past has shown."