Ancelotti says that Bale's back injury is not the reason he has missed games this season, instead blaming a "lack of pre-season training" that has led to a hamstring pull.
Earlier this week Madrid issued a statement dismissing reports that the winger had a suffered a slipped disc in his back and might need surgery.
Bale's pre-season was disrupted by the drawn-out negotiations over his move from Tottenham to Madrid and there have been concerns about his fitness since he joined the Spanish side.
Ancelotti is keen to have the Wales winger back in the squad with critical games against Juventus in the Champions League and the season's first El Clasico at Barcelona coming next week.
"Bale is available for tomorrow," the Italian told a press conference.
"He doesn't have a back problem, his problem was the lack of a pre-season. If you look at his last four years he has played more than 120 games.
"He is working very well every day, now he is in much better condition and he is ready to play.
"I have personal experience of the problem, I had three protrusions and it never hindered my ability to play. Many players have this problem.
"Tomorrow I want to give him minutes because he needs to play and to get to know how to play with the team."
The former Chelsea boss also rebuffed criticism from Wales manager Chris Coleman that he had unnecessarily rushed Bale into action by starting him on his debut against Villarreal on September 14.
"I have read that I was crazy to play him against Villarreal, but I wasn't the first one who played him, that was his national team manager, he added.
"He didn't have any problems in Villarreal. It was afterwards that he suffered the thigh strain."
Varane Raphael has been ruled out of the clash with Malaga and Alvaro Morata is in contention to start up front as Karim Benzema is carrying a knock.