The 22-year-old attacker has set his sights on a move to the Rossoneri as he is unhappy with life at the Premier League champions, as Goal.com exclusively revealed in December, but a transfer seemed to be out of the question after Berlusconi's previous comments
However, the move could now be back on after all following his apology.
"What I said was not directed at Balotelli. I apologize if I offended him with my comments," Berlusconi told Sky Sport Italia.
"I was misquoted. I was talking about how a team needs positive individuals in the dressing room and not people who could disrupt things with their behavior. It was not directed at one person in particular."
However Berlusconi remained coy on a potential move for the former Inter star.
"No-one at Milan has held talks with him. Neither I, nor Adriano Galliani, has identified him as one of our transfer targets."
Balotelli has a contract with Manchester City until June 2015.