The £16million move for the controversial 24-year-old former Manchester City player is seen as something of a coup by many, but Souness believes it is a risk not worth taking.
Writing in the Sunday Times, he said: "It's an enormous gamble by Rodgers, a gamble I don't think he needs to take because he has a very strong group of players.
"The harmony looks good but he may find, like every previous manager of the Italian, that he will spend more time talking about Balotelli, spending time with him and defending him, than he will the rest of the group put together."
Souness, who managed Liverpool to FA Cup glory in 1992 and has also been in charge of Newcastle, Blackburn, Rangers and Southampton, went on to say that he would not sign Balotelli if he was still in the Anfield hotseat.
He added: "At times Balotelli doesn't seem to enjoy football. Big teams can do without people who pick and choose when they will have a go. It's a high-risk signing. I wouldn't want him."
Balotelli is a proven performer, but the baggage that comes with him is considerable.
His spell with Manchester City from summer 2010 to January 2013 was a whirlwind one, with occasional sparkling performances interspersed with volatility on the field and erratic behaviour off it.
He scored 30 goals in 80 appearances for the club and set up Sergio Aguero's stoppage-time goal against QPR which saw them crowned 2012 Premier League champions - their first league title since 1968.
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