It was thought Balotelli could be brought in to replace the already-departed Pato and Robinho, who was expected to leave the club in the current window, but the 76-year-old has ruled it out.
"The name of Balotelli never came into my thoughts, he is a rotten apple and could infect every group where he goes, even Milan," he said to reporters.
Berlusconi also refused to comment on the future of boss Massimiliano Allegri, saying he was unsure whether he would remain in charge next season, but admitted there was little chance of securing the services of former Barcelona boss Pep Guardiola in the near future.
"[You ask] if Allegri will stay at Milan next season? I have to say the truth? Please, ask me another question..."
He continued: "I always tried to bring him [Guardiola] to Milan, because over the last [few] years Barcelona played the best football.
"Until last year our team had high class champions that could play football in Guardiola's style, but now the chances that he can come here are very low."
The Milan president was also keen to call for support from the San Siro fans and to show faith in the youngsters while they redevelop the squad.
"We are dealing with a lot of young players. We decided that we did not want a 'top player' over 21-years-old as we want to re-build.
"Fans must always follow the team with great passion and attachment but need to wait two to three years for AC Milan, after 26 years of success, for the success to come back."Milan is currently in seventh place in this season's Serie A with 30 points from 19 games.
- Sports & Recreation
- Pep Guardiola
- Massimiliano Allegri
- Silvio Berlusconi