When asked if Balotelli would be given another opportunity, Mancini said: "Sure. I am his manager and, like the other players, if he deserves another chance I'll give him another chance. But Mario now needs to deserve this."
The hearing between the player and his representatives and the Premier League champions had been due to take place on Wednesday, but the issue was resolved following "amicable" talks on Tuesday night.
And Mancini believes the Italy international, 22, who will miss Saturday's match against Reading through illness, made the correct decision not to pursue his action against the club.
"This is an old situation and it is normal when someone does a mistake he should take his responsibilities and Mario did this. It's normal," added the 48-year-old manager.
"He [should] respect himself, not me, because it's important for him to respect himself, very important."
City began the disciplinary process after Balotelli was sent off against Arsenal in April 2012.
In total, he received nine yellow cards and three reds - one of them retrospective - during the season.
Last Saturday, Balotelli was left out of the squad that defeated Newcastle 3-1 at St James' Park.
After the match, Mancini revealed the striker was "not in good form" and that was the only reason he had been excluded.
