The striker completed a €21 million move last week, and has enjoyed an esctatic reaction from Rossoneri fans who are delighted to see him return to Italy.
Raiola was instrumental in negotiating Balotelli's departure from Manchester City, and the agent believes the striker's return can increase the status of Italian football.
“Mario is happy to be at Milan. I've never seen him so happy in his career and I think he can bring Italy back to the front of European football,” Raiola told Calcissimo.com.
“We were not surprised by the joyful crowds who greeted him, as Mario is much loved."
Raiola also dismissed the idea that the move had come about after the player had fallen out with Manchester City coach Roberto Mancini.
"It’s not true that he left Manchester due to a row with Roberto Mancini. As Sir Alex Ferguson said, these things happen inside a squad.”
Balotelli could make his Milan debut when they take on Udinese on Sunday evening.