Ballesteros played an inspirational role for Europe in every Ryder Cup since he was persuaded to rejoin the team in 1983, whether on the course as a player, in the buggy as captain or as a mentor.
Gallacher, a three-time Ryder Cup captain himself, believes there is no better person to continue Ballesteros' legacy and inspire the European team than the Spaniard's countryman Olazabal.
Ballesteros, who made his Ryder Cup debut in 1979 but was left out two years later, died in May last year after battling a brain tumour.
Play in this year's Ryder Cup begins at the Medinah Country Club in Chicago on Friday of next week.
"There will never be another Seve in terms of a talisman. The next best thing is to have Olazabal as the captain. He will deliver the Seve message," said Gallacher, who was addressing a Ladbrokes Sports Journalists' Association lunch.
"It took a great effort from Tony Jacklin to get Seve on board (in 1983) but when he was on board there was a great passion to beat the Americans.
"Seve gave you points but he gave you more. This is the first Ryder Cup we can remember since it became a European team in 1979 that Seve will not play some sort of part.
"Even from his sick bed two years ago, Monty (2010 captain Colin Montgomerie) phoned him and he put forward a telephone message to the players.
"The players were apparently overcome by this. Olazabal will carry Seve's torch in there. He will give the Seve speech.
"It will be very significant, hugely. Olazabal is very proud and passionate. He is a very articulate guy."
Olazabal and Ballesteros were a successful partnership in Ryder Cup play, and Gallacher believes the current captain possesses many of the qualities of his late compatriot.
"He is not a golfer who is branded up like other golfers. He has very high morals, he won't sell himself. He is very strong-minded and this will come out next week," Gallacher said.
"He will keep his passion in the team room and the players will realise they have a great captain."
One of Ballesteros' legacies has been the central role he played in the re-emergence of European golf.
"It is in the British and Irish DNA to want to beat America. There was a feeling we would be losing something in 1979 when we became a European side," Gallacher said. The team was previously a British and Irish line-up.
"But Seve helped us get over that. There is a passion and it is in the Europeans' DNA now that they want to be part of this team."