Jese has been in fine form of late, scoring the winner against Valencia prior to the mid-season break before assisting Karim Benzema's opener shortly after coming on in Monday's 3-0 win over Celta Vigo.
The 20-year-old scored his third goal of the season on Thursday in the Copa del Rey and Ancelotti feels his recent performances must be enjoyed by all at the Bernabeu.
"He played well, worked hard, scored and was involved in the match. He is an important player and is in good form and we have to enjoy that," said Ancelotti before calming fears that his 70th-minute withdrawal was due to injury."
He added: "He only came off because of a cramp.
"(Gareth) Bale did very well and was dangerous, while Jese and Cristiano (Ronaldo) combined well."
Victory over Osasuna marked Real's fourth win in a row, in a week when Ancelotti was also boosted by Xabi Alonso agreeing a new contract with the club.
The Italian also moved to dismiss speculation that striker Alvaro Morata is set to leave the club.
"We signed a deal with a very important player in Xabi Alonso and that is very good for us," he said.
"We have not changed our plan (on Morata) and, also, (he) has not asked to leave. I am very happy with him."
‘I don’t think Liverpool would look at Ollie Watkins, a striker isn’t a pressing issue for them – it’s Arsenal who need one’ Former Reds star explains why his old club don’t need an out-and-out forward this summer
‘He’ll still be playing at 40 at a good level because he’s in such good shape and looks after himself so well. He does everything to be a top professional’: Ex-Liverpool coach insists Mohamed Salah has plenty more miles in the tank
