"I haven't signed yet but I have agreed for another year," Ballack, 32, told BBC Sport, adding he expected Milan's Carlo Ancelotti to succeed Guus Hiddink as coach next season at Stamford Bridge.
"I haven't worked under him and I don't know him very well but you can see from the work he has done at Milan that he is a successful manager," Ballack said.
"It's not done yet but it looks like he will be coach."
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