The gaffe-prone Italian politician launched an attack on Ancelotti’s tactics selection, saying he should have built the team around their flair players.
"We lost the title because of Ancelotti," he told La Repubblica. "Many times we did not use the right tactics.
"We have so many good dribblers and should have based our football on this asset, but we did the opposite."
The San Siro side are currently second in Serie A, seven points adrift of arch-rivals Inter Milan.
And Chelsea will be keen to pounce on this souring relationship, as they look to recruit Ancelotti for next season’s assault on the Premier League and Europe.
Ancelotti has continually played down rumours linking him to the Stamford Bridge job, but come the summer he could now find himself out of work.
Milan's vice-president Adriano Galliani is remaining coy on Berlusconi's tongue lashing, insisting he will give his opinion at the end of the season.
"I never comment, as a rule, on the declarations of president Berlusconi and I don't comment what is reported to me by the newspapers that I have not read," he told the club's official website.
"I said and I repeat that I won't speak before May 31 on these things, or at least I won't speak before we have reached the direct qualification to the Champions League."
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