Chelsea have gone into freefall since Wilkins was sacked as assistant coach two months ago, slipping from Premier League leaders to fifth place, nine points behind Manchester United.
Wilkins puts Didier Drogba's loss of form down to his bout of malaria, but admits other players have shown a mystifying lack of belief.
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Wilkins said: 'When I watch them play there's a lack of confidence there from a few of the players that shouldn't really be the case because they are top quality players, and I'm sure they will get back to the standards that they have performed at.
'It's been very disappointing. If you look at the level of performance it certainly hasn't been there and when you have a number of world-class players not actually playing to their maximum it's magnified 10 fold.'
However, Wilkins believes Ancelotti will cope with the pressure.
He told BBC Radio 5 Live's Sportsweek programme: 'Carlo's obviously been manager of AC Milan for eight years, therefore that does come with a lot of pressure so Carlo is used to the pressure that comes with big jobs.
They'll be fine: Ray Wilkins has backed Carlo Ancelotti to turn things round at Chelsea
'The one thing that will be hurting Carlo won't be the media attention, it will be the way the team are playing. He's extremely passionate about his football.
'He's a very decent bloke and he is a fun guy and he is laid back, but he has this burning passion for the fact that the players aren't really playing to their full potential.'
Asked if he could return to Chelsea as some reports have suggested, Wilkins added: 'No, I wouldn't have thought so.
'I think once Roman (Abramovich, the owner) has made up his mind that something will happen, then it happens.'
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