Chelsea are preparing to face Manchester City at Eastlands on Saturday.
They sit four points clear at the top of the Premier League with five straight wins over West Brom, Wigan, Stoke, West Ham and Blackpool.
The Blues opened the season with successive 6-0 wins over West Brom and Wigan and Mancini has since hinted that, as far as he was concerned, it is Chelsea's title to lose.
However, Ancelotti would not be drawn into playing any kind of mind games with his former national team-mate.
"I agree with him," said Ancelotti. "It's not a mind game, I know him very well and so he knows us very well. He knows our ability.
"You have to build a mentality of a team. He doesn't have an easy job, he is doing his best. I hope the club appreciate it.
"He's very competitive manager because he has experience, he has ability to read the game.
"It's a very good relationship, we were team-mates in the national team in the past. I met him two months ago in Manchester, the relationship is very good.
"Every game is easy after you win 6-0. You can say it was easy then.
"Before every game it is difficult. We started the season well but now we have another game, a different opponent and City are a strong team, they have a lot of player with a lot of skills.
"We have to prepare for the game well and do our best to play our football for 90 minutes."
City did the double over Ancelotti's Chelsea last season, winning 4-2 at Stamford Bridge and 2-1 at Eastlands, but Ancelotti insists now is the time to judge his team.
"That was the past," added Ancelotti. "I think it was a difficult moment for us when we lost at home but now it's a different story.
"If you want to judge my team we have more confidence compared to last year, we are in a good moment. I think we can do better compared to last time.
"City have a possibility to win the title. They didn't start so well this Premier League but they have a possibility. They have time to come back to first place in the table.
"Carlos Tevez is the most dangerous player of Man City. He has quality, he has power, he has a very good mentality. I appreciate his kind of play and we need to pay attention."
Chelsea crashed out of the Carling Cup in midweek 4-3 to Newcastle but Ancelotti does not believe it was a wake-up call for his side.
The team was filled with young talent and Ancelotti re-iterated that the competition was always going to be one for the kids.
"The Carling Cup was a different competition, we wanted to use it for the young players," he added.
"This is a different story. The Premier League is our priority along with the Champions League. I think we will have a fresh team.
"I have a lot of confidence in my players for the game at City."
Ancelotti is without Salomon Kalou and Yossi Benayoun for three weeks following thigh and calf injuries sustained in the defeat by Newcastle.
England midfielder Frank Lampard is also missing with a hernia problem.
"Yossi and Salomon had a check yesterday, I think they will be able to comeback after the internationals, maybe three weeks," added the Italian. "With muscle injuries it's always three weeks.
"Frank is not 100 per cent so we don't want to take a risk. We need to have more time to be fit."