Modric has been ruled out for three months after suffering a torn thigh muscle in Croatia's Euro 2016 qualifier with Italy.
However, Ancelotti is adamant Real have the resources to cope with the setback and are not in need of January reinforcements.
"No [Real will not be buying in January], because we are able to replace Modric," Ancelotti told Radio Nacional de Espana.
"We have other important players for this type of situation.
"Last year we had the same problem with the injury to [Sami] Khedira. We'll fix it by putting in another midfielder.
"We have the option of replacing him with Khedira, [Asier] Illarramendi and finally, we have the option of Isco, who does not have the habit of playing in the position but I think he can do it in some games.
"We have [Alvaro] Medran, a youngster from the Castilla who is doing very well and we like him. He may be an option at least to be with us."
Leaders Real return to La Liga action on Saturday when they visit Eibar.
‘He instantly popped into our ratings as one of the best U21 midfielders in Europe. The impressive thing is Slot has made him into more of a no.6' Inside Ryan Gravenberch's transformation at Liverpool
‘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
