Zinedine Zidane is ready to walk away from the club at the end of this season.
Madrid are now looking at potential options to replace him though and the Mirror says Ancelotti is targeted for a Bernabeu return.
Ancelotti has also won the Champions League with Madrid back in 2014 but was sacked by Perez a year later after failing retain the trophy following a semi-final defeat coupled with finishing runners-up in LaLiga.
An Ancelotti return may also play a role in where Gareth Bale lines up next season, with the Wales forward, currently on loan at Tottenham Hotspur, having flourished under Ancelotti in his first two years at Madrid before later being frozen out by Zidane.
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