Last Sunday's defeat to Liverpool see's them 10 points adrift of leaders Manchester United and the Italian manager will now focus on finishing in the Champions League places as he prepares the team for their clash with Fulham on Monday.
The former Milan boss told reporters: "Now for us it is difficult to think that we can come back and fight for the Premier League title. The gap is very big, we have to be honest.
"The most important thing is to reach fourth place in the table to maintain Chelsea in the Champions League and we have to fight with the other teams.
"It is better for us to take it game by game in the Premier League but we have to reach fourth place as a minimum."
Ancelotti also commented on how he is aiming to create a formidable strike partnership with Didier Drogba and £50 million man Fernando Torres, who struggled on his Stamford Bridge debut against former club Liverpool in a game that has all but ended the Blues title hopes.
The Italian added: "My aim as a coach is to try and find the best solution with the players I have.
"In this squad Drogba and Torres are fantastic strikers and we have to try and do everything to get them to play together."