If the renewal of his contract at Real Madrid if as true as you have stated then he will definitely not have a contract at Brazil again because he can't be coaching two teams at same time, earlier there were speculations to the point it sound like it was a done deal about ancelotti moving to the Brazilian team and that's why it's such great news about his contract renewal.
The Brazilian team will really be disappointed this deal couldn't pull through as there were expectations which were accorded the arrival of ancelotti but with this disappointment they will have to probably look into another coach and there will be change of expectations aswell. I feel since Xabi who was Madrids biggest coaching prospect was not willing to leave Leverkusen at the moment they have to conform with ancelotti extending his contract.
Ancelotti is more comfortable with Real Madrid and he also has a fairly good relationship with the players and Real Madrid management so that the new contract extension that Ancelotti has agreed to is really appreciated by the fans. Ancelotti is a genius coach so Real madrid will not let go of Ancelotti anytime soon and I think Real madrid has big targets with Ancelotti this season.
Yes, with Ancelotti staying with Real Madrid, we will see Ancelotti performance in this winter transfer window in recruiting players who can help him win the UCL trophy this season. Let's see if Ancelotti will try to get a good quality striker this season. Will Ancelotti approach Mbappe again in this winter's transfer window because if we look at this season, Real Madrid needs a main striker as a viable gap for them to fix.