Alonso set for Madrid start against Rayo
The Spain international has been sidelined with foot and groin injuries but made a substitute appearance in Wednesday's 7-3 victory over Sevilla.
Alonso replaced Asier Illarramendi with 26 minutes remaining and is now set to feature from the first whistle on Saturday.
"I'm going to rotate, but not thinking about Tuesday's game (at Juventus)," said Ancelotti.
"I have fresh players and that's why some players who have not played against Sevilla will play.
"Xabi (Alonso) will start, I do not know whether to play 90 minutes, but he will start."
Gareth Bale, Cristiano Ronaldo and Karim Benzema all started in the thrashing of Sevilla and Ancelotti has not ruled out unleashing the trio against Real's city rivals.
"The three of them have played very well together," he added. "Tomorrow (Saturday) I will decide if they play together again. They are ok so there´s no problem."