Mino Raiola, the Italian's representative, said on Tuesday that there was a possibility the 23-year-old forward could return to the Premier League, with the Stamford Bridge boss still in contact with his former charge.
Speculation surrounding Balotelli's future has reignited following a run of poor form and suspensions, but Allegri has moved to quash talk of a January exit and insists he intends to retain the enigmatic frontman.
|BALLON D'OR NOMINATIONS
|66/1||Mario Balotelli is 66/1 with Coral to be the Champions League's top scorer
“He arrived at the club in January and has done great things with the team since his arrival. He got 12 goals in his first 13 games.
“He played well at the start of this season as well. It can happen that a player has a dip in form, but when it happens to Balotelli, it’s blown out of all proportion.”
Milan vice-president Adriano Galliani supported his manager's stance, telling reporters: “Mario Balotelli will not leave Milan. He will stay with us for many years, and he is our star. He has a long contract and he will see it out.”
Allegri also urged the Italian media to end their obsession with Balotelli's private life, insisting that the Italy international should only be judged by what he does on the field.
The former Manchester City man, involved in a minor car accident days before a heated display against Parma, continues to make headlines on and off the pitch, but Allegri says the press should end their preoccupation with Balotelli's activities outside of football.
“I judge Balotelli based on what he does on the pitch,” Allegri added. “He didn’t do well on Sunday against Parma and I took him off.
“He’ll be available [against Lazio] and I think he’ll play well. He trained well yesterday and I think he should be left in peace as well.
“There’s far too much discussion of the man’s private life. I think that Balotelli should be judged for what he does on the pitch like all other players are.”