The Italy striker has been heavily linked with a move back to Italy after falling out of favour at the Etihad Stadium, although Milan vice-president Adriana Galliani has said that he is "99.9 per cent certain" that they will not sign the 22-year-old.
Tassotti, however, has described Balotelli as a "champion" and believes he would fit in well at Milan should a deal be made.
"Mario Balotelli would have no problem settling in at Milan," he told Sky Sport Italia."Is Balotelli arriving? It's the club that works on the transfer market, not me.
"Having said that, I'm sure Balotelli would have no problem settling in at Milan. He is a very strong player, there is no doubt.
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"He's still very young despite the fact he has been playing at this level for a long time. He had a fantastic Euro 2012 and we are talking about a champion."Milan are reported to have offered £17 million million for Balotelli, a figure short of Manchester City's £24m valuation.
There have also been suggestions that City would prefer the fee paid upfront, rather than in the six installments proposed by the Italian club.
On Sunday, Milan strengthened their position to land a European spot as a 1-0 victory over Atalanta moved the Rossoneri up to fifth place in Serie A.