The Azzurri boss believes the AC Milan attacker will bounce back from a dip in form that has seen him go a number of games without a goal.
The striker has not scored for Milan in his last five games and was named on the bench by Massimiliano Allegri for the club's trip to Barcelona in the UEFA Champions League.
Speaking ahead of friendlies against Germany and Nigeria on Friday and Tuesday respectively, Prandelli feels Balotelli has what it takes to come through his poor run of form.
"Great champions have to make their team win," he said. "They have something more to give but they have to be included in the game plan. You have to arrive to games mentally prepared. Mario is going through a strange and delicate time, but if one has character, then you can gain more strength from this.
"He knows how to play football, he just has to get his confidence back."
Prandelli also explained he has not yet decided who will form his squad for the FIFA World Cup next year.
The 56-year-old has 35 players currently in line for selection and has left the door open for in-form players to force their way into the squad for Brazil.
"There are places available," he said. "Many players are motivated, they want to prove that they can be a part of such a group. I have in my mind 35 players so nothing is definite."