Ancelotti was speaking ahead of their Champions League clash with Sheriff Tiraspol.
He said of Modric: “I'm pleased with how he's doing. He was out with an injury and has come back strongly. When you bring a player off in the 75th minute it's not because they're performing poorly, it's because I wanted to add some fresh legs.
"He changed the whole complexion of the game against Villarreal. He did really well in the attacking midfielder role and stopped Capoué from playing. I brought him off because you've got to remember that he's 36 and bringing him off a bit earlier can mean that he avoids an injury issue further down the line."
Ancelotti admits he's also happy with David Alaba at centre-half.
He added: “Militão and Alaba are doing really well. We've played eight games and have kept clean sheets in three of them. We're improving but it's a collective responsibility and isn't just down to the defence. Militão and Alaba have to get used to playing together, but they've got off to a good start."
Need a VPN? Or seeking to switch? Then support Tribal Football by clicking here to sign up with our official partners NordVPN. Not only will you receive the best VPN experience, but also great discounts by signing up via Tribal Football. Thanks for your support!