The Italian told evertonfc.com: "Dominic has all the attributes to become one of the best strikers in England and in Europe. He is fast, has good skills, is strong in the air and works extremely hard for the team.

"He also has a fantastic mentality and his desire to improve has impressed me ever since I came to the club.

"I am very happy he has signed this new contract, in the same week Mason Holgate committed his future to the club, and I am confident they will be important players as we aim to bring success to Everton."

Everton's focus over the final weeks of the season will be on trying to secure European football.

After drawing with Manchester United last weekend, Everton face another important test against Ancelotti's former club Chelsea.

"It's a really important game for us," said the Toffees boss. "We went out after the game against United with confidence, we played well.

"We try to repeat the same against a strong team like Chelsea and to try to break our (record) that was not good in the past with the top teams away. The condition of the team is good in my opinion."

Ancelotti's appointment was seen as a coup for Everton and the former Juventus and Real Madrid manager has his sights set a lot higher in the long run than trying to scrape into the Europa League.

"We are not a top team," he said. "I think the spine of the team is good. We have a mix of young players and experienced players. We can improve, we can be at the top. That is our dream. We can be at the top soon, as soon as possible. I'm sure that it's not going to take a long time for this."

Ancelotti has settled well into life in Liverpool, and fitted a trip to Crosby beach into his schedule earlier this week.

He said: "I feel good here. I want to live the city. I think it's a good place. We have to manage the weather but this is normal. I am from the north of Italy so I am able to manage bad weather. The place is really nice. I went to the beach on Monday, it was absolutely fantastic."