Bayern have so far failed with their attempts to sign the 18-year-old as Chelsea have refused to sell but they look sure to try again in the summer transfer window.
Hudson-Odoi is known to be keen on making the switch but German legend and former Chelsea star Ballack believes he would be better off staying at Stamford Bridge.
"I wanted to play when I was young," he said. "If I grew up in a club like Chelsea, I would want to stay at Chelsea, and Hudson-Odoi is one of the biggest talents in London and England, so I would stay and try to make my way.
"But, of course you want time on the pitch and want to be involved, and if you don't get the feeling then you will look to the right and the left and other clubs who have an eye on you, that's normal.
"But I hope that Chelsea will sign the contract because he's the future for the club. I hope he gets more time on the pitch."