Benzema was replaced after 32 minutes of Saturday's Primera Division win at Malaga after suffering a thigh injury and he will sit out the Champions League last-16 second leg against Schalke.
Benzema's absence from that match should not cause the Spanish giants too much concern as they boast a 6-1 lead from the first leg, but they are keeping their fingers crossed he will be available for Sunday's vital Clasico showdown with Barca at the Bernabeu.
Ancelotti said at a press conference on Monday: "He's recovering, he can't play tomorrow but we're confident that he will be back for Sunday."
The 26-year-old Benzema has scored 22 goals in all competitions this season and has formed a devastating forward triumvirate with Cristiano Ronaldo and Gareth Bale.
"He is a very important player, not only because he scores goals. He's picked up a knock and we are going to wait for him to recover," added Ancelotti, who said Madrid have the strength in depth to cover if Benzema is ruled out.
"We are lucky to be able to replace him if he can't play," the Italian said.
Real are currently three points clear of second-placed Atletico Madrid at the top of the Primera Division standings and four above defending champions Barca in third.