The 20-year-old has struggled for consistent first-team football under Ancelotti this season, starting just 13 of his 37 games across all competitions.
Despite often being relegated to the odd substritute appearance, Guler has managed to score four goals and provide seven assists.
Speaking to the press ahead of their La Liga clash with Celta Vigo on Sunday, Ancelotti was full of praise for the youngster.
Ancelotti told reporters: "He has progressed very well. He has become more important. In the future he will have even more prominence.
He is showing quality and he is having more continuity in the game. I think he’s going to be a fantastic central player, and not just a winger. For the future of Real Madrid he is going to be a very important player, because there are not many players of this profile in midfield."