Real Madrid gave Ancelotti a new contract until 2026. This means that Real Madrid still really needs Ancelotti's manpower. This means that the speculation regarding Ancelotti and Brazil is over. But I can't know if this is Madrid's move to keep getting money if they leave. Ancelotti has thanked the president of Brazilian football for being interested in using his services. It seems that Ancelotti in these words slightly indicates that he will honor the contract from Real Madrid.

Madrid announced Ancelotti's new deal through June 2026 on Friday, after repeated speculation linking him with the Brazil national team.

Source: https://www.espn.co.uk/football/story/_/id/39228484/real-madrid-sign-defender-january-window-ancelotti