Ancelotti is set to pick a strong side, having been told about the importance of the competition on his arrival at Stamford Bridge.
"I want to put out my best team," he said. "It's a very important competition in England. In Italy, the Italian Cup is not so important.
"We want to do our best. It is one of our objectives, our aim, to win it. Last year we won it. We want to do the best again this year.
"Watford are a good team. I don't know them very well, but I have an opportunity to watch a DVD. Every team can give you problems. It is important to stay focused and concentrated."