The Italian also claimed that he is now not bothered whether his team finish second or third next month.
"We are very close to Arsenal and not so far from Manchester United. Two months ago, to be in this position was just a dream," he said. "But we're still eight points behind United with only six games to go. That gap does not allow us to think we can win the title.
"Maybe we can finish second - but it's not important for Chelsea if we are second or third. At the start of the season my dream is only to win, not to finish second place.
"The first target for Chelsea is to win the title. The next is to reach a position that allows us to play in the Champions League next season."
Ancelotti also made strong suggestions that he is about to step down from his position, saying: "Obviously I have a plan for next season but it's not good to reveal it now. I have not spoken to the players about it and I'm not involved in extending their contracts.
"But they are all good professionals and they understand that sometimes in football the manager can change. They are working with me at the moment and maybe will work with me in the future or maybe they will work with another coach."
Chelsea host Birmingham at Stamford Bridge tonight, with kickoff at 19.45.