The Portuguese forward has been in sensational form this season, scoring 13 times in 12 La Liga appearances, while also equalling the record for goals scored in the UEFA Champions League group stages with eight.
Ronaldo is widely considered to be one of the two best players in the game, alongside Barcelona's Lionel Messi, and the former Manchester United forward was once again recognised when the shortlist for this year's Ballon d'Or was revealed.
And Ancelotti believes that Ronaldo fully deserves the title, having also praised the 28-year-old for his attitude.
Speaking to Onda Cero's 'At First Touch' programme, he said: "It's simple. For me the best player right now is Cristiano.
"He's the top scorer in the league, the top scorer in the Champions League and if we talk about technical quality he is the best.
"He has a great professionalism and seriousness, before and after training. That is the key to be at his level. He has not missed a minute (of training), nor does he want to."
The Italian also believes Gareth Bale - who joined Real in a reported world-record €100million deal in September - can begin to emulate Ronaldo.
The Welshman has struggled for fitness since arriving in the Spanish capital, but he has started to show glimpses of the form that persuaded Real to sign him in the close-season from Tottenham, including scoring the second in the 2-2 Champions League draw at Juventus in midweek.
"Yes (he can follow in Ronaldo's footsteps)," Ancelotti continued. "Many players had great problems in Madrid (when they first joined).
"I am told the Bernabeu whistled (Zinedine) Zidane initially."
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