On the eve of their first match against Porto, Ancelotti said the London team would need to advance to the knockout stages next year fully fit, brimming with motivation and with a bit of luck on their side in order to fulfil their ambition.
Chelsea must play their first three games without in-form striker Didier Drogba, banned by UEFA after verbally abusing the referee in the semi-final defeat by Barcelona in April.
"The first objective is to arrive at the final," said Ancelotti, who won the Champions League twice as coach of his former club AC Milan.
"It will not be easy but I think we have the possibility to do this," the Italian told reporters.
Chelsea, who top the Premier League having won their first five games, have come agonisingly close to lifting the European Cup so coveted by Russian owner Roman Abramovich since he bought the club in 2003.
They have reached the semi-finals in five of the last six years and made the final in 2008 before losing on penalties to Manchester United.
"It's not easy to win the Champions League, it's important to be a bit lucky," said Ancelotti. "I don't think there is a psychological problem, Chelsea have arrived very close and will do so again."
Central defender Ricardo Carvalho, who won the trophy with Porto before following coach Jose Mourinho to Stamford Bridge in 2004, said Chelsea needed to take each match as it came.
"We will miss Didier but better that we miss him now than later on in the knockout stages," he said.
INJURY LIST
Chelsea will also be without right back Jose Bosingwa, banned for two matches for derogatory comments he made after the controversial Barcelona game.
They have a long injury list including Joe Cole (knee), Yuri Zhirkov (knee), Deco (calf), Paulo Ferreira (knee) and Alex (groin).
Ancelotti said he would draft three youngsters into the squad against Porto, defenders Sam Hutchinson and Jeffrey Bruma and striker Fabio Borini.
None is likely to start, however, with Salomon Kalou set to take Drogba's place alongside Nicolas Anelka and Branislav Ivanovic lining up at right back.
"It's important when the competition reaches the knockout stages in February and March to be in very good condition," Ancelotti said.
Keeping his players injury-free will be a priority after FIFA banned Chelsea from signing new players for the next two transfer windows because of alleged irregularities in their pursuit of French youth player Gael Kakuta, who joined from Racing Lens.
"Porto have a lot of experience in this competition. They have won it and they have often got to the last eight," Ancelotti said.
"I think experience and tradition are very important in the Champions League."
Porto coach Jesualdo Ferreira said his players were starting the campaign with their toughest match.
"Chelsea are the strongest team in England," he said. "They have players who are very mature, very experienced so that has to make them the strongest team in this pha
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