The coach has played down the prospect of the Rossoneri bolstering their ranks in January and admitted that M'Baye Niang could move to Montpellier.
The Rossoneri have signed Adil Rami on loan from Valencia ahead of January and Keisuke Honda from CSKA Moscow, but the San Siro coach has no interest in additional transfer targets as he thinks his squad is already too inflated.
"We have to reduce the squad size, and I will talk with the management about it. Our squad should consist of 24 to 25 players," he told reporters on Saturday. "I don't want to talk about [reported Milan target] Radja Nainggolan because he is a Cagliari player, and I don't want to disturb him.
"We have talked a lot about the transfer market, but the management will take care of that. Rami and Honda are two good signings. Mattia De Sciglio and Stephan El Shaarawy have barely played this season [due to injury]. Our squad will be complete in January when our injured players return."
M'Baye Niang broke into Milan's first team quickly last season but has been used far fewer times this campaign and Allegri believes a loan move to Montpellier - which is on the verge of being confirmed - will aid his progress.
"Niang to Montpellier would be a good choice for him," he added. "Niang started well at Milan, but then he perhaps felt too much responsibility."
The Rossoneri are languishing in 10th place heading into gameweek 17 and rumors have linked the club's former midfielder Clarence Seedorf with Allegri's job.
Defeat in Sunday's Derby della Madonnina against Inter could pile even more pressure on the head coach and Allegri has demanded an improvement in performance.
"It's very unlikely that we will win tomorrow against Inter if we play like we did against Roma," he added. "We made many mistakes in that match.
"Now our job is to climb up the Serie A table, qualify for the Champions League quarterfinal and reach the Coppa Italia final."