Phillips, a redshirt sophomore, sustained the injury during a noncontact play. He will undergo surgery in the coming weeks after the swelling subsides.
"There is probably a potential hope for the season next year, but really that's up in the air," Bielema told reporters in Madison. "Every knee injury is different."
The 6-2, 224-pound Phillips appeared in five games last season as a reserve, completing 7 of 13 passes for 65 yards with an interception. He also rushed for 138 yards on 14 carries.
Phillips used his redshirt season in 2008, so he'll have two years of eligibility left unless he petitions the NCAA for a sixth year.
Adam Rittenberg covers Big Ten football for ESPN.com. He can be reached at email@example.com.