Alonso has 'every door open': Real Madrid's Ancelotti
Ancelotti is expected to leave Madrid at the end of the current campaign with Spanish media reporting former Los Blancos midfielder Alonso will take over next season.
Alonso, 43, said Friday he will leave Leverkusen at the end of the current campaign.
"I read that, that he's leaving Bayer Leverkusen, where he has done a fantastic job," Ancelotti told a news conference.
"He has every door open to him because he's shown he is one of the best coaches in the world."
Ancelotti has one year left on his Real Madrid deal but said he would reveal his future at the end of the season after reports he could depart to lead the Brazilian national team.
Alonso inspired Leverkusen to an unbeaten league and cup double in the 2023-24 season, while Madrid won La Liga and the Champions League under Ancelotti.
Both teams have struggled by comparison this term, with Madrid knocked out in the Champions League quarter-finals by Arsenal.
Madrid can still defend their league title, sitting four points behind leaders Barcelona with four matches remaining.
Los Blancos visit Barca on Sunday in a key Clasico clash and Ancelotti said his team can beat the Catalans for the first time in four clashes this season.
"We're motivated, excited, we've got a lot at stake in this game, and we have confidence that we can do it," said the 65-year-old.
"The last games against Barcelona have been difficult and tricky, but the last one has given us the confidence that we can win tomorrow."
After Barca romped to easy wins in La Liga and the Spanish Super Cup against Madrid, Los Blancos lost a hard-fought Copa del Rey final 3-2 in extra-time in April.