The 45-year-old fears the Rossoneri could struggle to replicate last season's third-place finish with rivals Inter, Juventus, Fiorentina and Napoli having strengthened this summer
The Rossoneri finished third in the table behind Juventus and Napoli last term, but Allegri expects Inter, Roma and Fiorentina to challenge for a Champions League spot in the coming campaign.
"Every year is different, but Juventus are favourites [for the title] in my opinion. They have bought some quality players like [Carlos] Tevez, [Fernando] Llorente and [Angelo] Ogbonna," Allegri said at a press conference.
"It will be a lot harder for Milan than it was last season because as well as Juve there are also another six teams that will be fighting for a place in the top three.
"Inter have become stronger with the arrival of [Walter] Mazzarri and they will be playing once a week. Roma have bought [Kevin] Strootman, a player who has plenty of experience despite his young age.
"And there are Napoli, Lazio and Fiorentina as well, so it will be much harder."
Allegri has guided Milan to three consecutive top-three finishes since taking charge of the San Siro side in the summer of 2010.