The AC Milan boss withdrew the striker after fearing his frustrations would boil over following a lacklustre display in the dramatic 3-2 defeat to Parma
The mercurial striker struggled to make an impact as the home side focused their defensive efforts on frustrating his involvement, with a yellow card for diving the sum total of his efforts before he was withdrawn for Alessandro Matri shortly after half-time.
And Allegri concedes he was concerned the former Manchester City man could have been sent off had his frustrations boiled over prior to his substitution, also being left aggrieved by his side's "naive" approach to the game.
"In the first half, we created little and conceded twice on the counterattack," he told Sky Sport Italia.
"We had to change something for the second half. I took off Balotelli because he didn't have a good game, while [Andrea] Poli had done well and it was a tactical issue.
"Balotelli had a few good moments but, overall, it was not a good game. I needed a centre-forward who could really play that role and Balotelli wasn't doing it, although he has the characteristics.
"Balotelli had also been booked, so I was afraid we'd go down to 10 men. After the break, we did more and went close to a third goal - but then that free kick happened at the end. We were naive and conceded two goals just before the end of each half.
"We should’ve closed down and not allowed any more space but, instead ,we got it wrong."
A last-gasp free kick from Marco Parolo compounded Milan to their third away defeat of the season and Allegri admits their away form is a cause for concern.
"We are not balanced yet, as we go from great focus in the Champions League to distractions in Serie A," he continued.
"I said this game was fundamental for us to keep up with the top si, but, as they all won, this weekend it becomes even more difficult.
"We need to improve a great deal away from hom, as we've only picked up two points this season on our travels."
There was some good news for Rossoneri faithful, however, as Allegri confirmed that Valencia defender Adil Rami and CSKA Moscow midfielder Keisuke Honda would complete their protracted moves to San Siro in the transfer window.
"Adil Rami and Keisuke Honda will be joining us in January and that will strengthen our squad," the 46-year-old added.