Real Madrid are reportedly considering whether to continue with the 65-year-old beyond the end of the season.
The Spanish giants currently sit four points behind Barcelona in the race for the La Liga title and face elimination from the Champions League after the 3-0 defeat to Arsenal in the first-leg of their quarter-final.
Ancelotti’s time in the Spanish capital may never have happened if Liverpool decided to hire him over Jurgen Klopp back in 2015.
Speaking with journalist Armando Ceroni on Swiss station RSI, Ancelotti revealed he had dreamt of taking over at Anfield, but only before he became Everton manager.
Ancelotti said: "My dream was to coach Liverpool, but then I found myself at Everton and I experienced their rivalry, and now I am absolutely an Everton fan.
“I really liked the environment, because there is a spectacular passion for the colours. You also notice the suffering that the fan has for Liverpool, which for many years and still today is the best in the Premier League."