Im not sure if this is possible and would let our experienced team to check. In the meanwhile I have a workaround.

1. Go to Tools>Options - Edit and check Enable AutoComplete for cell values
2. Move your list of items is in the range immediately above the Validation cell.
3. Hide the rows above your Validation cell.

Now, as you type Excel will look at the list above the Validation cell and AutoComplete based on it.

Note - As your list is too large, the autocomplete would take sometime until it reaches the closest option available.