Ancelotti, who played under England boss Capello at AC Milan in 1991, revealed in his autobiography: "He was surly, he didn't have a dialogue with the players.
"The problem is that to divide the professional rapport from the human one is extremely difficult.
"The rapport didn't take off, it was inevitable and that's what happened to us."
It was Capello's first season as Milan chief and it turned out to be Ancelotti's final campaign as a player.
He added: "Capello was the first who didn't consider me a starter no matter what. I was already thinking as a manager in the last year of my career."
Ancelotti then became the No 2 to Italy boss Arrigo Sacchi.