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It came after the Portuguese midfielder reportedly conceded Tuesday he was unhappy at Bayern and expressed an interest in AC Milan.
The 19-year-old, who has had a poor first season at the German champions, told German media that he was not satisfied as he was not playing enough at Bayern.
Both AC Milan and Manchester United have been rumoured to be chasing him.
Speaking in Singapore where Bayern have been playing a series of pre-season games, Ancelotti said that “Renato is with us.
“We said that after the pre-season together, we can make a decision. Yesterday Renato played very well and I hope he can continue to improve.”
Bayern beat Chelsea 3-2 in a competitive pre-season match in the city-state Tuesday. The Bundesliga season begins on August 18.
Ancelotti admitted earlier this week that there was a “possibility” that Sanches could leave his side.
AC Milan have been heavily investing in new players following the sale of the club by former Italian Prime Minister Silvio Berlusconi to a Chinese consortium in April.
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