Ancelotti hit out at the FA's decision to find Terry guilty of using racist language towards Anton Ferdinand.
"It is unbelievable - John Terry doesn't deserve this," said Ancelotti of his former captain, who was cleared of a similar charge by Westminster Magistrates Court in July.
"I cannot understand how the FA can make a different decision. I think that it is really strange."
Ancelotti was "really surprised" by the whole saga, which has dragged on for almost a year. He added: "He has a really fantastic relationship with everyone. I am sure he is not racist - 100%."