Ancelotti, who won the Premier League-FA Cup double with Chelsea during his previous stint in English football, has had his name linked with a possible return to Stamford Bridge following the London club's early season woes under Jose Mourinho.
Yet talking to BBC Radio on Sunday, Ancelotti ruled out the prospect of any return to the game in 2014-15, effectively ruling out the possibility that he would take over this season should Mourinho's increasingly shaky reign come to an end.
Ancelotti, who has also been touted as a possible successor to Manchester City's Manuel Pellegrini, said the Premier League was his "number one choice" for a return to the game.
He is taking a break from football following his successful reign at Real Madrid, which saw him win the Champions League for a third time after two triumphs with AC Milan.
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"The most important thing is to find a club with a good project and be competitive. If it's in England, it's better," Ancelotti, who has been living in Vancouver since his dismissal by Madrid in May, said.
"I will stay out until the end of the season and try to find another club next season. Not just in England, it can be in another country, but my idea is not to start now."
The 56-year-old, who was sacked a year after winning the double with Chelsea in 2010, backed the club's recent statement of support for the under-pressure Mourinho.
"Chelsea are used to competing at the top level. They have lost a little bit of confidence in their play and arrived at bad results. Slowly they can move on from this situation," he said.
"Mourinho is the best person to manage this because he is the one involved, he knows the situation and the condition of the players and the club took the right decision to stay with Mourinho."
(Writing by Ian Chadband, editing by Toby Davis)
