Reports have suggested that Ancelotti is facing dismissal after failing to win silverware with the Blues this season.
Baresi told Fifa.com: “If I was to give advice to [Roman] Abramovich, I’d say, ‘Keep Ancelotti’.
“Ancelotti did a great job in the first season, winning the double. This year has been a bit up and down, but he’s a good coach.
“He’s got one more year on his contract left and I think he can finish the job well next season.”
