Liverpool were long considered the heavy favourites to sign Werner this summer, only for Chelsea to strike a deal with the Germany international last month.
The Blues have paid Leipzig up to £53m to sign the 24-year-old, who has scored 78 goals in the Bundesliga and set up a further 27 since the start of the 2016-17 campaign.
Ex-Chelsea midfielder Ballack expects his compatriot to become a success in West London given the lack of serious competition for a starting spot compared to that at Liverpool.
"If Liverpool was really an option for him, he made the best decision for him, and only he can make that decision," he told the i newspaper.
"Chelsea are building a young team, a new team, with a young coach. It is a great project to be part of, given how young Timo is.
"To be the main striker, at a huge club like Chelsea, is the best place for him. He can have a much bigger impact than he could at Liverpool."