This is good news, Ancelotti is a coach who is extraordinarily competent to train a team like Madrid (He was successful in making Benzema and Vini Junior what they are today) he has a good strategy and also knows how to place players in their positions and the most important thing is that he is very appreciated and respected by the Madrid squad, this is very important because a coach who is hated will only damage the squad's performance.
Even though currently Madrid is at the top of the standings again, they seemed to be struggling against Alaves, even Madrid scored one goal in the 92nd minute. Girona also still has great potential to reclaim the top position, they have never lost so far.
Yes this is great news as it would be a big loss if he left the football stages once and for all one day. I think it would have been interesting to see him take responsibility of the national team of Brazil, but now that he decided to stay with Real Madrid I think it is more beneficial. He also can't let go as it seems. If you have the best job in the world in football and then you become older, I think it is also hard to let go.