Ancelotti, 49, officially takes charge on 1st July as Chelsea's fifth manager in less than two years following Jose Mourinho, Avram Grant, Luiz Felipe Scolari and Guus Hiddink.
"For me, the Champions League is a beautiful sensation because when I played I won two times in 1989 and 1990 and it was a fantastic achievement," he said.
"And it was the same as a coach in 2003 and 2007. Champions League, for me, is the best competition in the world and all teams want to win it.
"Five semi-finals in six years is a beautiful score (for Chelsea) but now we need to win."
Hiddink ended his short stint in charge with victory over Everton in Saturday's FA Cup final and a warning that Chelsea must instil some stability at the top, and give the new man time to bed in.
The Dutchman had agreed to take over on a temporary basis and succeeded in steadying the ship after a turbulent two seasons at Stamford Bridge following Mourinho's departure.
Chelsea indicated it was Ancelotti's long-term success that made him their number one target.
A club statement read: "Carlo was the outstanding candidate for the job. He has proved over a long period his ability to build teams that challenged for, and have been successful in, major domestic and European competitions.
"He also had a highly successful playing career in those competitions and therefore brings unparalleled all round experience to the job."
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