The 22-year-old has scored four goals in four matches for the Rossoneri since joining them from Manchester City last month.
"I'm seeing a great Balotelli," he told QS. "He is a player regenerated by the fact that he is close to his family again.
"As the national team boss, I have to be delighted to see Balotelli and [Stephan] El Shaarawy playing alongside each other. They are not incompatible."
El Shaarawy has scored 16 goals in 25 Serie A appearances for Milan so far this season.