The Italian came on as a substitute and turned home from close range to hand Liverpool all three points after an entertaining encounter in which Spurs had twice come from behind.
Lazar Markovic gave the hosts the lead with a low effort from just inside the area, before Harry Kane scored his fifth goal in three games as his shot from 12 yards out went through Simon Mignolet’s legs.
Steven Gerrard regained Liverpool’s lead from the penalty spot after Daniel Sturridge was brought down by Danny Rose, but Mousa Dembele levelled again on 61 minutes before Balotelli’s late winner.
The result leaves Liverpool in seventh, but the Reds are now just a point behind sixth-placed Tottenham.
On his return to the starting line up, Sturridge looked sharp during a frantic opening. He broke free of the Spurs defence, but his low shot from 12 yards to Hugo Lloris’ right was saved well.
A minute later, Gerrard’s free-kick from 25 yards went inches over Lloris’ bar, before the French goalkeeper did superbly well to keep out Sturridge’s blistering shot from eight yards as the ball fell to the Englishman kindly.
Liverpool’s pressing resulted in a goal on 15 minutes, the ball finding its way to Markovic on the left from Sturridge’s hold up play for the Serb to fire home into the bottom right corner through the grasp of Lloris, who could have done better.
But 11 minutes later the visitors were level through Kane, the striker turning well inside the area from Erik Lamela’s deft pass and finishing fortunately through Simon Mignolet’s legs.
It was Kane’s 23rd goal of the season in all competitions, and his eighth since the turn of the year.
Sturridge was unlucky not to give Liverpool the lead going into half-time, flicking the ball with his back to goal from six yards out only to see his fine piece of improvisation hit the post.
Liverpool were given a penalty after half-time when Sturridge was brought down by Rose’s flailing leg, giving Gerrard the chance to slot past Lloris high into the top right corner.
Lamela went close a minute after the goal, forcing a fine save from Mignolet from 25 yards, but Spurs levelled for a second time just after the hour.
Christian Eriksen’s free-kick was parried by Mignolet allowing Kane, who looked in an offside position, to centre for Dembele to turn home from four yards out.
But the last word went to Balotelli, who had only scored twice for Liverpool since joining from AC Milan in the summer. Brendan Rodgers brought the summer signing on with 16 mintues remaining, and he repaid his manager by turning home the winner after another sub, Adam Lallana, found him four yards out. It had taken him seven months, 14 appearances, and 48 shots to score his first goal for the club in the top flight.
The win means Liverpool have lost just two games in 21 in all competitions, moving them to within three points of fourth place.
See all of Tuesday’s Premier League goals on Sky Sports News HQ from midnight – or on Good Morning Sports Fans from 6am.
Liverpool: Mignolet (6), Can (7), Skrtel (6), Sakho (6), Moreno (6), Gerrard (6), Henderson (6), Markovic (7), Coutinho (7), Ibe (7), Sturridge (7)
Subs: Lovren (5), Lallana (7), Balotelli (7)
Tottenham: Lloris (7), Walker (6), Dier (5), Vertonghen (6), Rose (5), Bentaleb (6), Mason (6), Lamela (6), Dembele (7), Eriksen (6), Kane (6)
Subs: Chadli (5), Paulinho (5), Soldado (5)
Man of the match: Daniel Sturridge