A stunning strike from range by Kylian Mbappe that gave Real Madrid the lead in the 20th minute was cancelled out by a counter-attack effort netted by Swedish forward Williot Swedberg in the 51st minute, but Modric climbed off the bench to break help Real break the deadlock.
"It is an honour to coach and work with Modric, everything he has been able to achieve is because he is a fantastic professional and a man of the highest calibre," Ancelotti told reporters.
"When they equalised I think the changes gave a new energy to the team. It's a very important victory. These are two spectacular goals from players that showed they have an amazing talent, from the build-up to the finish. They train really hard and have put on a great effort during this international break to improve their conditions, we have to keep going.
"We competed well, the team was committed the whole game, Celta played well and with intensity, we won three points thanks to a fantastic pass from Modric, he has this quality and always contributes.
"It doesn't matter if it is when he starts or when he comes off the bench... he always helps us. He came on at a difficult moment in the match and changed the script."
Real are second in the LaLiga standings on 24 points, level with leaders Barcelona who have a game in hand and host Sevilla on Sunday. They will host Borussia Dortmund in a Champions League clash on Tuesday, before hosting their bitter rivals Barca in a much anticipated LaLiga Clasico on Saturday.
