The Rossoneri took an early lead at the San Paolo through debutant Adel Taraabt, but an equaliser from Gokhan Inler and a double from Gonzalo Higuain saw the hosts claim a 3-1 win.
Speaking after the game, Boban was dismayed by what he saw as a chaotic display from Milan and felt that Taraabt's debut represented the one positive for Clarence Seedorf's side.
"I saw a team in total confusion in the field who did not seem to understand anything," the former Rossoneri midfielder told Sky Italia.
"Errors may be here for a while as Seedorf develops the team but the only good thing was some impetus from Taraabt.
"That's why Milan are under pressure and finding things difficult - you have Balotelli, who does not move, Robinho, who is inconsistent, and Taarabt, who has just arrived. In my opinion, a third central midfielder in this team is essential."
The retired Croatia international, who played 216 times and scored 25 for the Rossoneri after joining from Dinamo Zagreb in 1991, was particularly scathing in his assessment of Balotelli, who was in tears after being substituted at San Paolo.
"[Balotelli] has never gave the impression of being a champion," the 1994 Champions League winner added.
"His football does not make a difference. Both at Inter and Manchester City never did great things. He is not among the true champions.
"He is potentially strong, but to build a team around him would be a big risk."
Milan sit 10th in Serie A, with 29 points from 23 games.