Liverpool have not lost a derby for 10 years, but come up against Ancelotti's in-form Everton who have made a perfect start to the 2020-21 campaign. They have recruited impressively with Allan, James Rodriguez, Abdoulaye Doucoure and Ben Godfrey all arriving, while they have the free-scoring Dominic Calvert-Lewin up front.
And Klopp believes Everton have the potential to challenge for Liverpool's Premier League crown this season.
"It's pretty clear they did some good business, and Carlo is a sensational manager," he told a news conference on Friday. "It was clear when he has the time to build something that he will do that. That's what he's done.
"This team looks really, really good -- I would like to say something different but it's not possible. And so, yeah, they are proper challengers. So many teams did good business in this transfer window and they all will improve."
Liverpool head into the game off the back of their heavy 7-2 defeat to Aston Villa. Klopp only had a couple of days with his full squad since, due to the international break and while he has been pleased with goalkeeper Alisson's continued recovery from his shoulder injury, he was unwilling to put a timeframe on his return.
For Klopp, Saturday's match gives his Liverpool side a chance to get their season back on track after the Villa defeat, but he believes players are still adjusting to playing without crowds.
He was asked whether the batch of lopsided scores this season so far could be down to players struggling with concentration as they play in front of empty stands and responded: "It looks like that's a reason, as nothing else has changed, only the scorelines without the people in the stadium.
"It makes sense to see it like this but I don't know 100%, but I see the scorelines. Of course, the audience, or the crowd, they sharpen your focus -- that's normal.
"And you have to do that yourself constantly but it's no excuse. As [in the game against Villa] one team scored seven, and one team scored two. There's still opportunity to use a situation, rather than suffer from it."