The 19-year-old, who arrived at Bernabeu from Fenerbahce last summer, has largely struggled for action during the 2023-24 campaign.
However, he has now started four of Real Madrid's last five La Liga matches, scoring five times in the process, including two goals in Sunday's 4-4 draw with Villarreal.
Guler scored his side's first and fourth goal in the thriller at Estadio de la Ceramica, and Ancelotti paid tribute to the Turkey international after the eight-goal contest.
"I think the closer to goal, the better. He is very effective, he scores a lot with little space, he has a special talent. He shows it better closer to the goal," said the manager during his post-match press conference.
Guler has six goals in 12 appearances this season
Ancelotti also insisted that he was not concerned with his side dropping points against Villarreal, with Real Madrid winning the title earlier this month.
The Italian has been rotating his side in recent matches in a bid to keep his players fresh for the Champions League final against Borussia Dortmund on June 1.
However, close to a full-strength XI is expected to take to the field against Real Betis next weekend.
"The goal was not the points. We don't need them. It was about playing a good game, with intensity, avoiding problems and injuries. Everything turned out perfect," he said after the 4-4 draw.
"It was an entertaining match, with rhythm, intensity, open, with little balance. What we got out is what we had to get out: play with intensity to prepare for the last game of the season.
Real Madrid will face Dortmund in Champions League final
"I'm not worried; it was a very open game with little balance. We played attacking football. It may be that we conceded more than necessary. It doesn't change anything.
"The final doesn't have to be like that. Up front, they played very well, and in attack, Arda Guler has shown something special."
Ancelotti also praised Brahim Diaz for his performance level this season, with the attacker managing 12 goals and nine assists in 44 appearances in all competitions.
"He has played a very good season, he helped the team a lot, above all he is one of those who has contributed more than the usual ones. Him, also Joselu who has scored many goals, Arda too, his season has been very good, the locker room is prepared to work well these two weeks and try to win," he added.
Real Madrid have still only lost once in La Liga this season, with 94 points from 37 matches leaving 12 points ahead of second-placed Barcelona in the table.