The controversial striker joined the Reds in a £16 million move from AC Milan in the final week of the transfer window, but has yet to score a league goal for his new club.
Balotelli has come under a barrage of criticism for his performances in his first 11 games for Liverpool in all competitions, with some reports even suggesting he has until January to prove himself or face being sold.
However, Pirlo believes his compatriot can still be a success if Reds boss Brendan Rodgers keeps his faith in the striker.
“The difference between other players and Mario is that every action he takes is going to be scrutinised,” the 35-year-old was quoted as saying by the Daily Mail.
“The media is interested in him, and things he does are going to be highlighted – where perhaps with other players they would not get such a reaction – or maybe even no reaction at all.
“There is no question over his talent – I have played with him and I know how good he is and how good he can be. It is the job of the Liverpool coach to manage him in the right way.
“He needs to be loved, he needs direction, but most importantly he needs to know that the coach believes in him.
“If he spends time with Mario – I know he can still go on and be a great player for Liverpool.”