The French forward has performed inconsistently in the Spanish capital following his summer move from Paris Saint-Germain, but has still shown flashes of the magic which mark him out as one of the best players in the world.
Mbappe, 26, has 13 goals in 23 games for Real Madrid across all competitions, and Ancelotti expects many more to follow.
"I think this adaptation period is over, now he's shown a good version of himself, he can still improve, but in the last games he's been good, he's over the little injury he had," the Madrid coach told a news conference.
"He's more motivated, more excited, happy to be here. His (adaptation) period, which he obviously needed, because everyone needs it, is over."
Mbappe scored on his return from a thigh problem as Real Madrid beat Pachuca in midweek to win the Intercontinental Cup.
The forward has endured various off-field problems this season as well as needing to find his place among the Spanish and European champions' other star names, including Vinicius Junior and Jude Bellingham.
"Where does Mbappe have to improve? Just in consistency," continued Ancelotti.
"Trying to make moves that only he can make, as often as possible.
"I don't ask him to be too involved in the build-up, because (of his) characteristics... and after he breaks loose, to put the ball away."
Joint La Liga leaders Barcelona and Atletico Madrid face each other on Saturday, with third-place Los Blancos in action on Sunday when Sevilla visit the Santiago Bernabeu.
Ancelotti said the title race would go to the wire this season.
"It will be a league that will be battled for much more than those in recent years," noted Ancelotti.
"Atletico have everything they need to fight for it, and they will do that, it will be a very entertaining title race and it can be won with fewer than 90 points."
