The Bayer Leverkusen coach is again being linked with Ancelotti's job this week.
Ancelotti says new contract talks "aren't a topic" and on the Xabi stories, he also said:" I am very good here, there are many games and I am focused on that.
"I have had him (Xabi) as a player. He has a high-level knowledge of football, he is doing very well at Bayer and I wish for him, like Raúl and Arbeloa, that he is a coach of Real Madrid.
"I know them and I love them very much. Hopefully one day they can be coaches at Real Madrid."