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Spanish newspaper Marca say the 35-year-old Real Madrid assistant, who is the son of outgoing Bernabeu head coach Carlo Ancelotti, has been identified by 49ers Enterprises, who are in talks to take over the Scottish Premiership club.
The Ibrox club are continuing discussions with potential managers, with sources indicating they are still in the early stages of the process and that suggestions of a leading candidate are inaccurate.
Five-time Champions League-winning manager Carlo Ancelotti, 65, will depart Real at the end of the month to take on the Brazil head coach job.
Italian Davide Ancelotti previously assisted his father at Bayern Munich, Napoli and Everton and was on the books of AC Milan and Borgomanero as a player.
Balague adds: "Davide will be with his father for the first two weeks of June, and then, if something comes up, he'll start on his own. If not, he'll stay in Brazil."
Barry Ferguson has overseen Rangers' past 13 games as interim head coach following Philippe Clement's sacking in February.
The 45-year-old will take charge of Rangers' final home game of the season against Dundee United on Wednesday, before they end their campaign at Hibernian on Saturday.
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