The Rossoneri president reiterates that he does not want to make a move for the Italy international and calls for patience with the fans regarding the re-building of the club
Goal.com revealed in December that the Rossoneri had put a bid together for the former Inter man to replace Alexandre Pato and Robinho, with the 22-year-old ready to leave England.
Balotelli grabbed headlines last week after a furious training ground bust-up with City boss Roberto Mancini, and Berlusconi insists he is not interested in the Italy international.
"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 are currently in seventh place in this season's Serie A with 30 points from 19 games.