The French runners-up had made a 46 million euro offer for the Brazilian, considered one of the best centre-backs in the world.
Galliani even flew to Paris to negotiate with PSG sports director Leonardo, a former Milan coach.
But after PSG announced they had cut off talks with the Italian giants, Milan came out and claimed Berlusconi had decided to keep the 27-year-old.
"I feel much better thanks to the president Berlusconi," said Galliani.
"I'm also a Milan fan and they (the fans) should thank Berlusconi. This was an act of heroism.
"By keeping Thiago Silva, Milan will lose a lot of money, even this year, and that's money that Silvio Berlusconi will cover.
"The Milan fans must remember what the president has been doing for the last 26 years. His heart won the day."
Silva's agent Paulo Tonietto said the decision to keep his client showed what the Brazilian is worth and claimed he deserved a pay rise.
However, only a year ago he signed a contract extension until June 2016 and Milan seem unwilling to renegotiate so soon.
"I think that's a natural possibility but I think it will be easy to come to agreement with a great person such as Thiago Silva," said Berlusconi.
"We're in a (financial) crisis and even for my family it's not easy to maintain Milan's great expenditure."
It wasn't just Galliani trying to position Berlusconi as the club's saviour, as happened three years ago when the Italians tried to sell Kaka to Manchester City for more than £100 million -- Kaka refused to go and so Berlusconi turned around and said he had decided to keep the Brazilian.
The main man himself was not slow to remind the club's fans just how important he is to them.
"They (PSG) made a very interesting offer of 46 million euros and we took this possibility on board," said Berlusconi.
"But then we had a look at the centre-backs transfer market to replace our Thiago and found that it would not have been a convenient operation.
"The old "rossonero" heart of Silvio Berlusconi managed to say no to this type of offer for a defender who will make Milan win in Italy and in Europe."