PSG have been linked with a move for Terry, who captained Ancelotti's Chelsea team between 2009 and 2011.
But while the French club is looking for reinforcements at the back, the manager insists there is no plan to make a move for Terry.
"We are looking for a central defender. The club is in contact with some players, but not John Terry," Ancelotti said.
Ancelotti was unable to lead PSG to the Ligue 1 title last season, coming in mid-way through the campaign and finishing second as Montpellier were crowned champions, but he is expecting to go one better.
"Last year, we ranked second. This year, we clearly want to be champions," he said. "There's also the Champions League, which will be as important as Ligue 1. But I think it will be easier to win the league."
Ezequiel Lavezzi joined from Napoli earlier this week, and the boss was delighted to get the player on board.
"Lavezzi is an experienced player," he added. "He has played four seasons in Italy. He is really motivated and made a good impression during our last meeting. He can bring quality and competition to the team," he said.
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