The 23-year-old had been linked with a move away from San Siro earlier this summer, with a move back to the Premier League with Arsenal thought to be in the offing.
But Balotelli looks set to stay at the club following CEO Adriano Galliani's insistence he would not be sold and fellow attacker El Shaarawy feels that 'Super Mario' is determined to prove his critics wrong and deliver success back to the Rossoneri this term.
"Mario is doing well," he told La Gazzetta dello Sport.
"He has a lot of desire to show what he can do and get back to being a champion and he has all the qualities to succeed. He's very important to us.
"[Our objective] has to be more than getting into the top three. This group deserves it and I can see the determination in the eyes of my team-mates."
Milan are under the tutelage of legendary striker Pippo Inzaghi this season and El Shaarawy is looking forward to working with the 40-year-old.
"He transmits incredible enthusiam and that's his best quality. The thing in particular which he asked me are off the pitch, about time off. I give a lot of value to those things."
Milan have endured a miserable pre-season tour of the USA, losing 5-1 to Manchester City and 3-0 to Olympiakos, but El Shaarawy is confident they will be ready in time for the new campaign.
"I understand that the fans are disappointed but I can assure that the game plan is there. All we need is a little patience. I'm convinced we'll be ready by the end of August.
"I have a lot of confidence. I see the right spirit and commitment in everyone."