Ballard suffered the injury in practice Friday. He left the practice field on a golf cart.
"We feel awful for Vick. He's been a warrior for us," coach Chuck Pagano said. "The way he fought and battled and rehabbed and trained to get back, it's very, very unfortunate. Injuries do occur. It's the ugly part of the game. It's a tough pill to swallow. You don't ever want to lose anybody."
Ballard missed all but one game last season after tearing the ACL in his right knee during practice. He rushed for a team-high 814 yards as a rookie in 2012 and went into this training camp expecting to compete with Trent Richardson and Ahmad Bradshaw for the starting position.
Richardson, the No. 3 overall choice in 2012, struggled last year after being traded to the Colts in September. He sat out the afternoon practice for "precautionary" reasons, but did stay after practice to catch balls from the JUGS machine.
Bradshaw, who owns two Super Bowl rings, missed all but three games in 2013 after having neck surgery.
Information from ESPN.com Colts reporter Mike Wells was used in this report.