Should the Spanish champions beat Saudi Arabia's Al Hilal in the showdown in Morocco, the Italian coach believes it will provide a major boost to his players who are chasing multiple trophies this season in the Champions League, LaLiga and Copa del Rey.
"Getting here has been very difficult, we have made many sacrifices but we are here, like this club always are, so today is a day to be excited," Ancelotti, who led Real to a LaLiga and Champions League double last season, told a news conference.
"It's a key moment of the season. When you arrive in contention in February... March, is always a decisive time. And we are here as always.
"The Club World Cup is a very important challenge, we are very close to a title that is very important and to be here is a sign that you were successful.
"I will ask my players to go and enjoy themselves in the final because if they enjoy we will do well."
After several key starters were absent from their 4-1 win over Egypt's Al Ahly on Wednesday, Ancelotti confirmed that forward Karim Benzema and defender Eder Militao, who stayed behind in Madrid to treat injuries, joined the team on Thursday and should be available for the final.
"The players are progressing well physically in a decisive stretch of the season," Ancelotti said.
"I still believe that the squad has improved compared to last year.
"We will start with the Club World Cup final, a beautiful moment and a title that we are looking forward to winning."
Al Hilal shocked South American champions Flamengo 3-2 in the semi-finals and Ancelotti is looking forward to taking on familiar foe Ramon Diaz, the Saudi Arabian club's Argentine manager, in the showpiece.
"We faced each other when Ramon played for Napoli 40 years ago and I remember scoring a goal, well, a great goal," Ancelotti said laughing.
"He was a great striker, intense, strong and with ability in the area. He left a good memory in all the teams he played. Now it's the first time we play against each other as coaches. I'll give him a big hug because I have a great respect for him."