Breaking news. I don't know how true it is but Fabrizio Romano has entered the news.
Breaking: Carlo Ancelotti has decided to LEAVE Real Madrid at the end of the season, reports Onda Cero!

If this happens, who could Real Madrid bring in to replace him? Ancelotti was very successful there. It's rumored that the management wants to replace him with Xabi Alonso. But these are just rumors for now.
I think Real Madrid should continue with Ancelotti. But if he leaves, Alonso would be a very good choice.