Benatia had seemed set for a summer move after being strongly linked with Manchester City and Chelsea earlier in the summer, and Real Madrid and Bayern Munich in recent weeks.
The player himself was reportedly keen to look for a transfer, but Pallotta appears to have no intention of selling.
"Benatia? I don't know if there was a communication problem, but I want to make it clear that he has never been for sale, we have never received offers nor are we entering into negotiations," said Pallotta.
"Mehdi is our player and he will be for this season, he is very important for us on and off the field."
Watch Liverpool take on Manchester City in the International Champions Cup on Thursday morning - kick off is just after midnight, live on Sky Sports 1.