The Rossoneri star has been in poor form this season.
"We really like Mario, but he has to convince us to earn a permanent deal. Mario is feeling well. He is desperate to stay here at Milan. But like I have said before, he does not merit a permanent deal at the moment," Galliani is quoted as saying.
The former Manchester City striker has endured a miserable time in Milan since his arrival last year. He has scored just three goals, with only one of those coming in Serie A.
His attitude has been called into question on more than occasion, by different managers, and it seems as though he has done little to impress the Milan hierarchy.
Jose Mourinho once described the talented youngster as 'unmanageable', having worked with him at Inter Milan.
Liverpool have struggled this season, with the lack of a potent goal threat, so a return to Anfield for Balotelli may be mutually beneficial for all parties concerned.
It remains to be seen whether Balotelli is the kind of player that current Liverpool manager Jurgen Klopp will be willing to work with. With the Italian's history, it seems doubtful.