With a pulsating final between city rivals Real and Atletico Madrid finely poised at 1-1, Bale struck five minutes into the second period of extra time to break the hearts of the recently-crowned Primera Division champions.
Having missed several chances throughout normal time, including a clear cut opportunity when through on goal when the game was still goalless, Bale held his nerve to steer a header into an empty net after Angel di Maria had seen his initial shot saved by Atletico goalkeeper Thibaut Courtois.
His persistence impressed Ancelotti, who said: "It was very important because he had tried before, but he was unlucky in front of goal.
"But he turned up when he was needed."
It is the second time that Bale has scored a crucial goal in a cup final in his first season with Real, with his solo match-winning goal against Barcelona in the Copa del Rey earning rave reviews.
Bale's strikes in showpiece encounters will go a long way to silencing the critics that doubted his ability to live up to his world record £85.3million price tag, and Ancelotti is confident the former Southampton and Tottenham midfielder is capable of improvement.
"All season Gareth has been good and he will be better next year," Ancelotti added.
Marcelo's strike and Cristiano Ronaldo's penalty gave the scoreline a rather flattering look as Real claimed a 4-1 victory and finally sealed the dream of 'La Decima', their 10th European Cup triumph.
"We're very proud of having won this for all Madrid fans," Ancelotti said. "Happiness is giving happiness to those who always follow us. The fans are very happy and that makes us happy.
"I have had a fantastic group of players who have always been professional and they showed that in this match too. Not only those who were delighted to be playing, but also those who were not playing.
"We've worked hard this season to achieve this."
Atletico had looked on course for a famous double as, having wrapped up the La Liga title last week, they took a 36th-minute lead on Saturday night through Diego Godin's header.
Yet their failure to double their lead ensured they were on the back foot for much of the final half hour and their defence was finally breached in the third minute of added-on time when Sergio Ramos headed home from a corner.
From then on, there was only going to be one winner, with several Atletico players showing visible signs of fatigue, yet boss Simeone, who was involved in an ugly on-field spat with Real defender Raphael Varane before the final whistle, was proud of his players.
"This fixture doesn't deserve one tear, when you give your life, there's nothing to say," he said.
"It's part of the game. You can win, you can lose. Today we lost but know that we gave everything. That exalts us and gives us the ability to continue growing."
The Argentinian added: "Now we rest, we have summer to restart and work in the same way."
- Sports & Recreation
- Atletico Madrid
- Thibaut Courtois