Inter striker Balotelli is the son of Ghanaian immigrants who was adopted by a family in Brescia at the age of two.
"I think Italy is not ready for diversity yet. It isn't easy for Balotelli to grow up in a society like this," said Leonardo.
"I admire him very much and do not see the 'villain.' I see a lad who made it in complicated circumstances."
Balotelli has repeatedly been the subject of racist chants by Juventus supporters, who claim 'A black man cannot be Italian.'
However, the 19-year-old is also bitterly criticised for his arrogant attitude and baiting of opponents.
"He is the product of the environment he was placed in," continued Leonardo.
"Without understanding his past, it's difficult to work out his present.
"He'll never be a Lord and his story must act as a lesson for everyone, as Italy will experience more and more of them as time goes by.
"Italy never colonised anywhere and so they struggle to understand these issues all the way."