The Italian forward is said to be close to completing a move to Anfield, but the ex-Everton keeper believes that it could be a bad move for his old rivals.
"I've never seen him do anything that has made me go 'wow'. If he's worth £16m, then I'm still worth about £4m," talkSPORT quote Southall as saying.
"He is going to chip in with about 10 goals if they are lucky and if things go well. It is a risk taking him there. He could come back and the first two or three games be brilliant, but lose interest.
"It doesn't look like he is their type of player. I may be wrong but, if it was me, I would never sign him in a million years."
Meanwhile, Balotelli's agent has claimed that Liverpool have courted his player for months.