Real Madrid manager Carlo Ancelotti hailed Toni Kroos as "one of the best midfielders in the history of football" on Friday, saying he "respects" the player's decision to "go out at the top" when he retires this summer.

Kroos, 34, announced this week that he would retire from football after playing for Germany at the European Championship.

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The midfielder has won 22 trophies with Madrid since joining in 2014, including four Champions Leagues and four LaLiga titles, and will have the chance to add to that tally when Madrid play Borussia Dortmund in the Champions League final on June 1.

"Veterans and legends have to choose their destiny," Ancelotti said in a news conference ahead of Madrid's last league game of the season, hosting Real Betis at the Bernabéu on Saturday.

"Toni has made his decision and we have to respect it... Replacing a player of that level is difficult if not impossible, but this squad has the resources. The youngsters must take more responsibility."

Kroos has been in career-best form this campaign, holding his own with Madrid's next generation --including Aurélien Tchouaméni, Eduardo Camavinga and Jude Bellingham -- to make 32 appearances in LaLiga and 11 in the Champions League.

"He wants to go out at the top and he has the chance to do that, I understand it," Ancelotti said. "Saying goodbye like that would be ideal. Everyone wants to go out at the top, but then you need the courage to take the decision, and Toni has that."

Kroos could end his career winning three major trophies if Madrid can add the Champions League to their LaLiga title, and then Germany win the Euros on home soil.

"Technically, a player of Kroos' quality is hard to find, but that isn't what we're thinking now," Ancelotti said, when asked about the team's future without the midfielder. "We're thinking about saying goodbye to Kroos and preparing for the final. Toni is very calm, very focused on what he has to do tomorrow and on June 1, and with Germany.

"He's German, so trying to convince him to change his mind wasn't so easy... There were no tears. He was convinced of the decision he's taken."

Ancelotti also confirmed that Tchouaméni would miss the Champions League final, as he would not recover from his foot injury in time.

"He won't be back for the final, he's ruled out," Ancelotti said. "I think he'll recover for the Euros."