The two-time World Cup winner believes the controversial forward could go far with the right attitude, while revealing he is set for a return to Roma
The 22-year-old netted the winner in Italy's 2-1 Confederations Cup win over Mexico on Sunday, but made the headlines for all the wrong reasons earlier this month when he was booked twice - and subsequently sent off - within four minutes of the Azzurri's World Cup 2014 qualifier against Czech Republic.
And the Brazil legend has urged the AC Milan forward to make the most of his talent, while warning him to curb his temper on the field.
"Balotelli could become one of the greats of the game. He has a particular character, though. He must learn to control himself in order to give his best on the pitch," the Brazilian told La Gazzetta dello Sport.
The 43-year-old then went on to praise Neymar as he feels his compatriot, too, has the potential to become one of the best players in the world.
"Neymar is an incredibly strong player. He can become a real star as well," he added.
Cafu has been linked with the position of sporting director at Roma following Franco Baldini's recent departure and he has admitted that the Serie A side have contacted him about a return.
"There has been contact and I think that there will soon be news... A future as coach? I'm not ready yet, but I'm studying to become one. We'll see."
The former right-back wore the Roma jersey from 1997 until 2003, winning one Serie A title during his time at the club.