The former Juventus director feels the Rossoneri do not have the quality to get the best out of the striker, who has suffered disciplinary problems since returning to Serie A
With the Rossoneri enduring a difficult start to the Serie A season, the Italy international has cut an increasingly frustrated figure in recent weeks.
There has been much speculation about his mental state, not to mention his future at San Siro, and Moggi admitted that he would not be surprised to see Balotelli leave sooner rather than later.
"In recent times, he's been bad," the former Juventus director told Falla Girare. "He's always waiting for the ball on his feet, from a standing start, it nearly seems like he's playing on his own.
"In my opinion, Milan is no longer the squad most suited to him. Now they're not even a team. They bought trequartisti when they needed attackers."
Indeed, Moggi says Milan are currently paying the price for a disastrous recruitment policy and intimated that it is not coach Massimiliano Allegri who should be in danger of losing his job because of their poor form, but CEO Adriano Galliani.
"It's not [Allegri] who should be sacked, but those who have given him that squad," he reasoned.
Turning his attention to his former club, Moggi claimed that Juventus have nothing to fear ahead of Tuesday's must-win Champions League clash with Real Madrid in Turin.
"I see it going well for Juve because the Spaniards concede so many goals," he opined. "They must be quick because Real struggle at the back, even if they do score a lot in attack."
The Bianconeri are in dire need of a victory over los Blancos, having been beaten at the Santiago Bernabeu last time out after drawing their opening two games in Group B, against Copenhagen and Galatasaray.