The Colombia captain is set to leave Real this summer after a disappointing season and expected to be available for a knockdown fee.
Ancelotti worked with James at Real and Bayern Munich and said, "I really like him as a player.
He added: "It doesn't matter if they are young or old; experienced or inexperienced. It is important to have good players. The names that have been mentioned are the same ones that were mentioned a year ago when I was with Napoli. They follow me!"