Rodgers also revealed that he didn't want to bring Balotelli to Anfield from AC Milan in the summer of 2014 but was left with no option by the club's owners.
The Italian striker managed to score just four goals from 28 appearances in all competitions for the Reds during his one-year stay at the club.
Rodgers said on Sky Sports' Goals on Sunday: "I was asked the question, and I felt Mario wasn't someone who suited the profile of what we were after.
"Mario has big talent. I wasn't thinking I'd be any different in terms of managers who've had issues with him but, at that moment, we didn't really have another option.
"Come the end of the summer we were struggling to get in the type of player we wanted and the ownership thought this was a player I could develop.
"It didn't quite work for us and it cost us."
Balotelli was loaned back to Milan in the summer but has managed just five Serie A appearances for the Rossoneri this season.