Manchester City forward Balotelli has been linked with a move away from the Premier League champions with Atletico Madrid forward Falcao touted as his replacement in a £45 million switch from Spain.
Balotelli was dropped from City's squad for their home match against Tottenham on Saturday. He was spotted out late the night before the game having been dropped.
Balotelli is in the Italy squad for their international friendly match with France on Wednesday. Donadoni said: "Balotelli is a very talented player. But he needs to improve some aspects of his character.
“If he were to do that, then he could become the best player in the world.”