Ancelotti's Spanish giants take on the Reds at Anfield in Group B and the Italian admits it is an honour to come to Merseyside as just the second person to have won three European cups after Paisley.
"He was a fantastic manager and to be sitting here in the stadium is a great honour for me," former Chelsea boss Ancelotti said.
"The atmosphere at this ground is always a little bit special, and the European history is exceptional. I think you will see a spectacular explosion of football on Wednesday night, everything that is good about the game."
Madrid sit at the top of their group with six points from two matches while Liverpool are three points behind in third.
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