The Colombian, signed from Real Madrid last summer, has a contract until 2022.
Everton have an option to extend for a further year, and Ancelotti believes James is happy at Goodison Park.
"Really, we didn't talk about this in this moment we are only happy he is here and he is happy to be here," Ancelotti said.
"So if we are happy, he is happy, there is no problem for to sign the contract
"It is not my job to extend the contract with the player, I can only give the advice to the club to extend the contract, and I can give the advice to the player to stay with us - that's it."