Tuttosport says the arrival of new coach Clarence Seedorf has settled Balotelli, who was getting itchy feet at the start of the year.
However, Balotelli's agent is fielding interest from abroad, which includes Arsenal.
Mino Raiola is no favourite of Milan president Silvio Berlusconi, who has also been critical of Balotelli this season.
Raiola refused to consider former Manchester City striker Balotelli's departure in January, but has left the door open to a summer exit - with Arsenal heading the queue of clubs keen to take the striker off Milan’s hands.
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