Bale has been particularly poor in recent weeks and is currently on his longest goal drought since joining the La Liga giants from Tottenham 18 months ago having gone eight games without finding the net.
Los Blancos have been overtaken by arch-rivals Barcelona in the domestic title race after suffering their fourth defeat in 14 games in 2015 at Athletic Bilbao but remain favourites to ease into the last eight of the Champions League for a fifth consecutive season.
The European champions hold a 2-0 advantage against Schalke in Gelsenkirchen three weeks ago ahead of their second leg clash at home on Tuesday night.
Ancelotti insists Bale should not be singled out for criticism given the poor performances of the whole team in 2015.
“I think we would have to drop the whole team using that criteria given the whole team isn’t playing well,” said the former Chelsea boss.
“I would have to drop Karim because he hasn’t scored in a few games. I would have to drop Cristiano, the central midfielders, I am making a more general consideration of the team that has to improve.
“Everyone must do their bit. I don’t think Bale is happy with how he is playing and he understands that he has to improve.”
Ancelotti also revealed that his star front three of Cristiano Ronaldo, Karim Benzema and Gareth Bale will always start when fit and believes his faith in the players that delivered a club record four trophies in 2014 will eventually be rewarded.
“I have complete confidence in them (Bale, Benzema and Ronaldo),” he said.
“They have given us so much in the past and our identity is not going to change.
“There has been a general drop in form, not just of the three of them, but of the whole team.
“Right now the team is not helping our strikers much.
“We are not playing fast, we are passing the ball too much and we need to try to find the right pass to make the most of our strikers’ potential.”
After the Schalke game, Real will host Levante this weekend before travelling to the Nou Camp to face Barcelona on March 22.