Vinicius has netted five times and provided as many assists in the Champions League alone this season to help Madrid book a place in the final, while also scoring 13 goals in LaLiga, which they clinched for a record-extending 36th time last weekend.
The record 14-time European champions will take on German side Borussia Dortmund in the Champions League final at Wembley on June 1st.
"He's doing a great job," Ancelotti told reporters on the eve of Saturday's league trip to relegation-threatened Granada.
"He's still got the Champions League final to come and then he'll be at the Copa America. He's very close, and if he has positive results in both competitions, he could well win it (Ballon d'Or).
"Before I came to coach Madrid, I saw Vinicius on TV and I thought what an incredibly talented player he looked. When I arrived here, that much was clear, and he's improved on many things to enhance that talent.
"He's better at evading his markers now and has improved in front of goal as well. He's done so with a spectacular work ethic on a daily basis, he's focused in training and recovers well after matches.
"He's a highly disciplined professional and he deserves everything he's achieved."
But Ancelotti said the rest of his squad have been just as important in a campaign where several key players at Madrid have suffered injuries.
Vinicius moved to the Santiago Bernabeu from Brazil's Flamengo in 2018.
"He's among the best in the world and this is Vinicius' moment because he brings us so much. He's been important in us making the Champions League final and winning LaLiga. But we mustn't forget how the others have contributed," the Italian said.
"Madrid's time is up until the first of June. After that, who knows, it might be Borussia's moment."
French defensive midfielder Aurelien Tchouameni is a doubt for the final after picking up an injury in their semi-final win over Bayern Munich on Wednesday.
"(Goalkeeper Thibaut) Courtois will play, as will (Eder) Militao. They both need the game time... (goalkeeper Andriy) Lunin has to be ready to play as well. That's why I'll have to assess the goalkeeping issue in the coming games," Ancelotti said on team rotation.
"We're not sure if Tchouameni will make it for the final but we'll do all we can to see if he can recover. The rest will rotate, including (centre back Antonio) Rudiger and Nacho."
