Ancelotti noted in his Saturday news conference previewing the game at the Bernabeu that Ronaldo had been outshone by Barcelona forward Lionel Messi as the European champions stumbled through February and March.
Ronaldo responded in style against second-from-bottom Granada, netting five goals for the first time in his career as Real romped to a 9-1 victory, their biggest win in La Liga in almost half a century.
His three goals in eight minutes in the first half constituted his fastest ever hat-trick and he added two more in the second period in a scintillating display that took his tally for the season in Spain's top flight to 36 goals.
He is four ahead of Messi at the top of the scoring chart ahead of Barca's game at Celta Vigo later on Sunday and has scored more goals this term than 53 of the 98 teams in Europe’s top five leagues.
"He improved along with the rest of the players," Ancelotti told a post-match news conference on Sunday. "It is good for him and good for the team."
Sunday's crushing win lifted second-placed Real to within a point of leaders Barca, who lost 1-0 at home to Celta in November but are on a seven-match winning streak in all competitions.
Ancelotti said he would gladly swap Sunday's result for nine 1-0 victories in Real's remaining La Liga matches this term.
"Of course I would swap, but what should be noted is that the team is playing again in the way it wants to," he said.
"We have to be focused like we were today. Our objectives are closer and the players understand the chance to play as a team, to help the team with their individual quality."
Real have La Liga games at Rayo Vallecano and at home to Eibar before they play at Atletico Madrid in the first leg of their Champions League quarter-final on April 14.
(Reporting by Iain Rogers, editing by Justin Palmer)
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