Balotelli has already found the net on three occasions this season for Massimiliano Allegri's men, who opened their UEFA Champions League camapign with a 2-0 win over Celtic on Wednesday.
The Italy international has now scored 15 goals for Milan since joining from Manchester City in January, and Galliani believes that competing for the side he supports is helping the 23-year-old perform at his best.
"Balotelli is fantastic, Balotelli is happy," Galliani said.
"I don't want to talk all the time about sentiments, but I think that playing for the team he supported since was a child is helping him to perform better on and off the pitch. It's a mind thing."
Galliani also revealed that he expects Kaka, who re-joined Milan from Real Madrid on a free transfer earlier in the month, to return from a hip injury sustained in the 2-2 Serie A draw against Torino last weekend.
"Kaka was sad, but now he's picking up," he added.
"He had an injury like many other players and he'll be back soon.
"He suffered from a muscle injury like 10 players do every week in Serie A. He will heal eventually."
