The 25-year-old Ozil moved from Real Madrid to Arsenal last year for a reported fee of £42.5 million.
But he failed to live up to his lofty pricetag, scoring seven goals in 40 appearances in a season that did not go to plan for the Germany star.
And Ballack, a veteran of 98 caps for Germany, said he feels Ozil has lost confidence after making the move to the Premier League.
"It's difficult to say where his head is going to be at the World Cup - I saw him play for the national team at the weekend and I was not surprised, not scared, but a little bit concerned, by his performances actually," Ballack said at a promotional event.
"He has done well for Germany, and he played well during the qualifying campaign, but in the last few months - since his move to Arsenal - he has not been the same player, in terms of his confidence, that we used to see in the national team.
"I don't know whether the Arsenal move has affected him because he was untouchable and in Germany we still expect him to be one of our best players.
"But he is not a leader on the pitch, like a captain."
Ballack feels Ozil is still a quality player, but that he has to take on more responsibility as a senior member of both Germany and Arsenal's team.
"He is a fantastic player who still has to find his role and his responsibility for the team, and when he was criticised for his performances, he looked surprised, he looked lost," he continued.
"People expect so much of him, but he can improve his body language massively because he is now at an age where he is no longer a young talent or a promising player.
"As one of our best players he has to take more responsibility, and we expect more from him at the moment. Hopefully, when the World Cup starts, we will see a different player."
Germany are drawn in Group G at the FIFA World Cup, alongside Portugal, Ghana and the United States.
