AC Milan striker Balotelli looks set to feature in Cesare Prandelli's Italy squad, who were drawn alongside Uruguay, England and Costa Rica in Group D.
Having played against Balotelli during his time with Manchester City in the Premier League, Suarez acknowledged the strengths of the 23-year-old.
Suarez believes the striker is one component of a strong Italian side but believes Balotelli has even more to offer.
"Italy's backbone is of a sublime level," he was quoted as saying in the Gazzetta dello Sport.
"A line with Buffon, Chiellini, Pirlo and Balotelli has few equals in the world.
"I played against Balotelli when he was at [Manchester] City. Mario has an incredible talent, he should exploit it more.
"I remember some games in the Premier League, like the 6-1 at Old Trafford, he was fantastic."
Uruguay take on Italy in the final group stage match on June 24, after facing Costa Rica and England in their opening two games.