Ancelotti won the trophy twice as a player then steered AC Milan to three finals, winning the trophy in 2003 and 2007 but losing in a remarkable final to Liverpool in 2005, when Gerrard lifted the trophy.
Liverpool also lost to Milan, in 2007, so Gerrard knows exactly what Chelsea have bought into in appointing the Italian as successor to Guus Hiddink.
"I think it's a good appointment for Chelsea," said Gerrard, "but I'm not so sure it's good for Liverpool, we will have to wait and see.
"He is a fantastic manager. We played two Champions League finals against him, won one on a fantastic night in Istanbul, but the second time around he did us, and they beat us and he was spot on tactically in the second game so I think they have appointed a very good manager."
Gerrard is anticipating a fascinating clash between Ancelotti and Liverpool manager Rafael Benitez next season in the Premier League.
"I think they are both fantastic managers and will make the Premiership even more exciting. These managers love going head to head against each other, to test each other, so I am sure Rafa and Ancelotti are looking forward to testing themselves again.
"I am sure the Chelsea players are very excited," added Gerrard. "I haven't had a chance to speak to them about it but I am sure they are very happy because when you look around the world there are many good managers and Ancelotti is certainly one of them."