Real's injury worries are starting to ease with Benzema following Gareth Bale back into the squad, as Ancelotti's side continue their pursuit of Barcelona at the top of the table.
Benzema has missed Real's last six matches since suffering a knee problem in mid-April while Bale started his first game in the 2-1 Champions League defeat by Juventus on Tuesday after a spell on the sidelines.
The team, however, are still without injured midfielder Luka Modric, whose ability to link-up with the forwards has been badly missed.
“Benzema is available and feeling strong but he is not 100 percent,” Ancelotti, whose side trail Barcelona by two points, told a news conference.
“Tomorrow I will decide whether he starts or he is on the bench.”
Despite the mood of crisis that descended on the Bernabeu due to the number of absentees, the team was coping well until their Champions League first leg defeat by Juventus.
They are still confident, however, of turning the tie around in the return leg in Spain.
Ancelotti was heavily criticised for Real’s performance in Turin and for playing centre back Sergio Ramos in midfield where he struggled.
They need to bounce back in a difficult game against fourth-placed Valencia, who are fighting for a Champions League spot, and Ancelotti has not ruled out playing Ramos in midfield again.
“I have not decided who will play in the middle of the pitch and I will make a decision on the day,” said the Italian coach.
Ancelotti pointed out that Ramos had played their effectively in other matches.
“Ramos has my confidence and he is capable of playing in a lot of different positions. I wasn’t afraid to play him there against Atletico and Sevilla," Ancelotti added.
"He has played well there but he didn’t do well the other day,” he said.
“The team is fine mentally and we are treating the game now against Valencia as a final. After that we will start thinking about the return leg against Juventus, there is no way I will rest anybody.”
(The story was refiled to change Thursday to Friday in first paragraph)
(Reporting by Tim Hanlon in Barcelona; Editing by Toby Davis)
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