The 21-year-old scored in the 2-0 win over the Republic of Ireland on Monday and will be a likely starter in the crunch contest in Kiev.
However, Neville hopes that Balotelli’s Manchester City team-mate Joleon Lescott and experienced Premier League opponent John Terry can keep him from having an impact.
“Joleon will know him better than we do, that's the great thing,” the ex-Manchester United full-back told the FA’s official website.
“There will be no surprise for Joleon on Sunday and the same for John Terry who'll have played against him as well, so that's a good thing.
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“But obviously knowing and playing against him means that there will be that added extra spice that Balotelli himself will want to put one over on England.
“He plays in the country, he's a big figure in England with respect to the media he gets and he's a champion of England now with Manchester City and he will be very difficult to play against.”
Roy Hodgson was named the new manager of the Three Lions less than two months ago but has fashioned a team that has yet to be beaten in the five games he has been in charge and Neville heaped praise on the 64-year-old.
“[Hodgson] is calm, doesn't get carried away by things, brings a great deal of humility, trusts in his players and has faith in them and I think they are recognising that he is someone they like and want to play for.
“I think that's important and one thing about the group in this last three, four weeks, the work rate, the endeavour, the effort has been absolutely incredible.
“Even for me having played with quite a few of them, to see it from the other side is inspiring really.”
Neville was capped 85 times for England during his professional career but admitted coaching the national side has taken the intensity up a level.
“I was quite passionate on the pitch, but on the bench, I can't control myself,” he added.
“It's good to have someone calming next to me, because I'm bobbing up and down like a cork really.”