Scholes prefers the Brazil coach over current United manager Michael Carrick, who has a deal to June.
"The perfect one out there - I say perfect - Ancelotti is still out there," Scholes said on The Good, The Bad & The Football Podcast.
"I know he is coach of Brazil... he is the perfect one for Manchester United where you think he will make players feel a million dollars.
"And he has the experience of winning stuff. But the question is, is he too old now? That's the only thing. Is there anyone else of that ilk, with more experience? They need presence as a leader."
On Carrick, he added: "Can we see Michael winning the Premier League? I don't know yet, and I think the biggest thing is, what type of manager will they look for? A tactician or a man manager who looks after people?"