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Red Star headed into the December-March winter break 10 points behind Serbian champions and league leaders Partizan Belgrade. They also suffered a 20th successive early exit from European competition.
Once a force in Europe, Red Star are now a pale shadow of the side who won Europe's premier club competition before political strife in the Balkans in the 1990s and economic mismanagement at the club reduced them to also-rans.
"We need to inject fresh blood into the club at once by adding young talents from Red Star's academy," Prosinecki told reporters on Monday.
Article continues below"They are the club's future and I am convinced that's the only right way of looking at things because signing players who become surplus to requirements after six months is not the best policy," he said.
"Building a team capable of giving our fans something to cheer about will take time and we can only think of domestic silverware again in a few years," he said.
"We also need to buy several quality players to add steel to a team based on youngsters but it's up to the board to decide whether we can afford them."
