Grealish picked up the injury during Everton's 1-0 Premier League win over Aston Villa on 18 January. The England international had quickly become a key figure following Moyes' return to the club.
Speaking ahead of Saturday's trip to Brighton, Moyes revealed the severity of the problem. "We believe he's probably going to need surgery," the Everton manager said. "That's still not absolutely confirmed, but it probably rules him out for the rest of the season.
"It's really disappointing for the player and for the club. Jack is a big character with huge experience. He's been a very important part of what we've been trying to do, and we'll miss him."
Grealish had enjoyed a strong run of form on Merseyside after a frustrating period at City. While his return of two goals and six assists in 22 appearances only told part of the story, Moyes regularly highlighted his influence in the final third and his ability to create chances under pressure.
Asked whether the injury affected any thinking over Grealish's long-term future at Everton, Moyes was cautious. "It's far too early to be thinking about that," he said.
Moyes also confirmed Everton were still monitoring the transfer market but played down expectations of late business. "We're looking, but January is a very difficult window," he added.
With Grealish sidelined, Moyes faces another selection headache as Everton look to maintain momentum in the second half of the season.