Carlo Ancelotti has said he had "zero doubts" about returning to Real Madrid but hinted that he may have to accept the departure of captain Sergio Ramos, saying "I never imagined a Real Madrid without Ancelotti, and it happened."
Ancelotti, who previously coached the club from 2013 to 2015, was presented at the Real Madrid City training complex on Wednesday.
The 61-year-old Italian has signed a three-year contract and replaces his former assistant Zinedine Zidane, who resigned last week.
Ancelotti said he hadn't yet had time to discuss summer signings or his coaching staff with president Florentino Perez, and backed the current squad -- including Gareth Bale and Eden Hazard -- to compete for trophies.
"I saw the president earlier, we spoke for a little while, it was all very fast," Ancelotti said. "We haven't had time to talk. We'll start to work in the next few days. I just thanked the president, being here is very important for me."
He added: "I think the squad is very good. There's a mix of players with experience -- [Toni] Kroos, [Luka Modric, Ramos, Bale, [Karim] Benzema -- and young players with quality: Vinicius Junior, Rodrygo, [Federico] Valverde... the squad is big, we'll have to reduce it a bit.
"I think with this squad [we can compete]," Ancelotti added. "With this squad and without the players out on loan like Bale, [Martin] Odegaard, [Dani] Ceballos, Madrid got to the Champions League semifinals and fought for the league."
Ancelotti said that he needed to get up to speed on the state of contract negotiations with Ramos before commenting on his situation.
"I've just arrived, I have to talk with the club about all that," he said. "I never imagined a Real Madrid without Ancelotti, and it happened. We all have to accept it... I know all the players well, it's good to return and work with them and Sergio Ramos is one of them.
"He's been fundamental to all the successes the club has had. He's talking about his renewal but as I say, until yesterday I was in Liverpool. When I know the details we can talk more openly."
The futures of a number of veteran players -- who Ancelotti knows well -- have been in doubt after they lost their first-team places under Zidane.
"I have a lot of affection for Gareth, Isco, Marcelo," Ancelotti said. "They're Real Madrid players and I'll try to motivate them, but there's a judge who isn't me, it's the pitch... Gareth hasn't had a lot of time in the Premier League but he's scored a lot of goals. He returns, I know him well, and I think if he has the motivation to try to play at his best he could have a great season."
He also backed Hazard to overcome the fitness problems that have seen him struggle to make an impact in two injury-hit seasons in Spain.
"He's a top player," Ancelotti said. "He's had problems, he still hasn't reached his potential but I think he will. This could be the year for him."
In his first spell as Real Madrid coach, Ancelotti won the Champions League and Copa del Rey, as well as a UEFA Super Cup and FIFA Club World Cup, before being sacked in 2015.
He joked that he recognised many of the journalists at his first news conference, saying "the only thing that changes at Real Madrid is the coaches," and promised to play "offensive, spectacular, intense football."
His predecessor Zidane -- who he called "a friend" -- quit last week alleging a lack of support from the club and president, complaining that he had been undermined by leaks to the press.
"What can I say about Zizou? He won three European Cups and did a fantastic job," Ancelotti said. "That's football, one coach comes, another goes... I haven't spoken with him, it's all been very fast, but I'll talk to him for sure."
He added: "I've been in football for 40 years. I know this world well. We have to accept what happens and have respect for everyone, players, coaches, journalists... I don't know the personal relationship Zidane had with the president. When Madrid called asking if I wanted to come back, I had zero doubts."