The 31-year-old has largely struggled to show his best form for Los Blancos since arriving in a big-money deal from Chelsea in the summer of 2019.
Hazard has only managed six goals and 10 assists in 66 appearances for the capital giants, including just one goal and two assists during the 2021-22 campaign.
The Belgian has missed a lot of football in recent months, having undergone surgery to remove an osteosynthesis plate in his right fibula, but he returned against Cadiz in La Liga on May 15.
Hazard was an unused substitute for Real Madrid's final league game of the campaign against Real Betis on May 20, but he is expected to be involved in their Champions League final squad.
There has been a host of speculation surrounding the attacker's future at Bernabeu ahead of the summer transfer window, with his contract only having two years left to run.
"His plan is quite clear: he is staying and he is doing so with a lot of motivation because he has had a tough time in these last years. He wants to show his quality," Ancelotti told reporters.
Hazard has accepted that he has struggled since arriving at Bernabeu, but the attacker remains confident that he can prove his worth to the Spanish giants.
"The coach knows that I still have two years here," Hazard told Het Laatste Nieuws. "The first three years have not gone well. I want to show everyone what I can do. I am focusing on Saturday - the Champions League final against Liverpool - and continue my preparation for the season that's coming."
Hazard has said that he has "always dreamed" of representing Los Blancos and is not ready to give up despite his struggles since making the move to the club.
"I'm still in my dream, I've always dreamed of this. My life goal has been to play here. My family has always been happy here, [and] even now they are," he added.
The former Chelsea forward has also revealed that he 'feels good' following his operation, and he could yet have an important role to play for Real Madrid in Saturday's Champions League final with Liverpool.
"I feel good, the operation went well. Everyone knows I needed it, I was lucky to be able to do it. I'm [back] just in time for the Champions League final," said Hazard.
The attacker moved to Real Madrid in July 2019 off the back of a successful spell at Chelsea, scoring 110 goals and registered 92 assists in 352 appearances for the Blues in all competitions. body check tags ::