The Italian striker joined Milan on transfer deadline day from Manchester City and could have the chance to make an instant impact at the club.
Allegri has revealed that he has no problem with putting Balotelli straight into the starting lineup, hinting that he could partner Giampaolo Pazzini.
"He joined on Thursday and is in good shape physically," said Allegri.
"I will decide today (Saturday) whether he'll start or be on the bench. It is not just a tactical choice, but also dictated by the situation.
"In my view he can be paired with Pazzini, who has done well so far this season."
Milan are currently sitting in fifth place in Serie A.