We introduce a new algorithm for ellipse recognition. The approach uses Mahalanobis distance and statistical and analytical properties of circular and elliptical objects. At first stage of the algorithm the starting configuration of initial ellipse is defined. Next we apply a condition which describes how much the shape is ellipse-like on the boundary points.The algorithm can be easily applied to detection of elliptical objects also on grayscale images. Moreover, we discuss the improvement in iris image preprocessing.