The 19-year-old reportedly close to joining Lyon on loan in January after Los Blancos reached an agreement with the Ligue 1 club.
"He's a very important player because he's one of the talents to have come out of Brazilian football," Ancelotti told Diario AS.
"We're evaluating him. But it's not true that I said Endrick should leave Real Madrid to go to the World Cup. That's a matter between Real Madrid and the player.
“He needs to talk to the club and make the best decision for himself and for Real Madrid."
Signed from Palmeiras in 2022 for a deal worth up to €60 million, Endrick arrived with huge expectations with his debut season scoring seven goals in 37 appearances.
However, his second season has been far more challenging. A hamstring injury disrupted his pre-season, ruling him out of the Club World Cup and the start of La Liga.
Upon returning, he found himself behind Gonzalo Garcia in Xabi Alonso’s plans, managing only 11 league minutes so far.