Bale has started Madrid's last three matches, but was taken off at half-time of Saturday's 2-0 league win over Granada at the Bernabeu.
Ancelotti revealed after the match that Bale had been replaced as he "was not comfortable after getting kicked", but said it was more of a niggle than an injury and expected the world's most expensive player to be fit for Madrid's next match.
However, speaking at a press conference on Monday, Ancelotti confirmed the Wales international was still not 100 per cent and would not be involved against Espanyol, where Madrid hold a 1-0 lead from last week's first leg in Barcelona.
The Italian said: "He tried to train but had discomfort in his left leg. We prefer that he recovers and he will not play tomorrow,
"He will train to be ready for Sunday. Jese will play in his place."
Madrid travel to fourth-placed Athletic Bilbao in La Liga this weekend as they look to keep the pressure up on top two Barcelona and Atletico Madrid, both of whom are one point clear of Ancelotti's side.
Athletic have won nine and drawn the other two of their 11 league matches at their new San Mames stadium this season.
Bale has been hampered by niggling injuries since his record-breaking 100million euro move to Madrid from Tottenham last summer, including thigh and calf problems.
That has forced him to sit out a number of matches for the Spanish giants, but the 24-year-old has still been able to show the Madrid faithful just what he is capable of in some of the games he has featured in.
He has notched 10 goals in all competitions so far and has also created a number of assists for his team-mates to help establish Madrid as the top-scoring team in La Liga with 60 goals from 21 games.
Madrid have also won their last 10 successive matches, keeping nine clean sheets in the process, and are unbeaten in 21 games in all competitions stretching back to a 2-1 loss at Barcelona in October.