Real are said to want to Kane and Benzema to play together at the Bernabeu and their interest is being driven by Ancelotti, who has identified Kane as his preferred striker.
Ancelotti has now confirmed he is staying at Real Madrid in a move that could implications for Kane and his future.
If Benzema moves to Saudi, that would increase the need for Real to move for Kane this summer. But the 29-year-old is out of contract at Spurs next summer when he looks set to be available on a free transfer.
Asked about Kane on Saturday, Ancelotti said: “Harry Kane is a top player but we have to respect Tottenham, he’s a Tottenham player.
“I can guarantee to you that Real Madrid will have a competitive team again next season.”
Ancelotti has been strongly linked with the Brazil job but the Italian has said he is “very happy to continue” at the Bernabeu next season.
On his own future, Ancelotti said: “I’m happy at Real Madrid. No problems with the club. I’m very happy to continue and we will try to do better next season.”