Former Everton midfielder Wallace damaged his medial ligaments during Saturday's 2-1 FA Cup round-two victory over Chesterfield.
Tranmere remain top of League One on goal difference but Wallace adds to their already significant injury problems.
Forward Jean-Louis Akpa Akpro and winger Abdulai Bell-Baggie are sidelined, while Joe Thompson, Andy Robinson and Paul Black have only recently returned to fitness.
Manager Ronnie Moore told BBC Radio Merseyside: "We can't go and get anybody until January, so what we've got is what we've got.
"We'll probably just about get 18 for the next game, but there might be a few square pegs in round holes again."