The controversial forward has scored 18 times for Milan this season, including 14 in the league, but has drawn criticism for his behaviour on the field in recent matches.
While admitting that Balotelli is important for his plans, Prandelli has warned the 23-year-old that his place is far from automatic.
"Balotelli? Nobody will be untouchable. We will have to take it one game at a time and decide what works best against which opponent," Prandelli told Corriere della Sera.
"You have to motivate Balotelli in order to get the best out of him. That's worked out well when we did it in the past. He occasionally makes mistakes, but he never gives up. He has scored 14 goals for the national team. That's quite a lot. He needs to be close to the goal.
"But when you think about a difficult competition like the World Cup, I cannot say that he will start in each game. I am happy to have plenty of alternatives. Not too long ago, nobody seemed ready, but now we have [Mattia] Destro and [Ciro] Immobile."
Balotelli made his international debut in 2010.