Bale has come in for heavy criticism from media and fans alike in Spain for his recent performances.
His display in the 2-1 Clasico loss against Barcelona attracted particular scorn, with the former Tottenham man's car attacked by supporters following that defeat.
However, Bale netted a double for Wales last Saturday against Israel, a brace that served as a timely reminder of why Real shelled out a club-record fee to secure his services.
"His last few games have been good. He scored against Levante and his first half performance against Barcelona was important for us," Ancelotti said.
"After that, he did a great game for Wales. The international break has helped him to rebuild his confidence."
His next chance to impress will come against Granada at the Santiago Bernabeu on Sunday, when Real will hope to put the Barca defeat firmly behind them.
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