Los Blancos clinched top spot in Group B by beating the Swiss champions 1-0 at St. Jakob-Park on Wednesday night, with Cristiano Ronaldo scoring the only goal of the game as the European Cup holders racked up a club-record 15th successive win in all competitions.
Basel now need to avoid defeat at Liverpool in the final round of fixtures in order to pip the Reds to the second automatic qualification spot and Ancelotti fancies Paulo Sousa's men to get a positive result at Anfield.
"I think Basel are currently better than Liverpool," the Italian +told reporters. "I see a small advantage for Basel for the last round."
Indeed, Ancelotti admitted that Basel had posed Madrid plenty of problems with their high-intensity game.
"We did not play as we usually do," the former Chelsea boss conceded. "We defended well, we concentrated well and the most important thing was the victory.
"But Basel played with a lot of heart. They showed an intense game and were able to put us under pressure in the second half."
Liverpool will host Basel at Anfield on December 9, while Madrid are tackling Ludogorets at the Santiago Bernabeu at the same time.
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