Yes it is. I've asked the DNR this before because I'd have my step son come hunting with me and he would carry his pellet gun with. With Grouse, Squirrels and Rabbits it's perfectly legal. Compressed air or compressed gas projectile is legal for them. Pheasants and Hungarian Partridge it restricts it to a 22.
Great way to get the kids involved. Air rifles are a great tool to get them used to gun safety and marksmanship. They are also great small game guns where legal.
All my kids started with the same Daisy red ryder BB gun I started with (yep - gonna shoot your eye out!). It's pretty beat up and you can watch the BB flight with the naked eye so it isn't real strong, but they enjoy it. It isn't enough to hunt with but they enjoy shooting beer.....errrr.....pop cans. We then move up to a 22 when they are ready.
You want a challenge - try hunting chipmunks/ground squirrels with one! Them little suckers are quick and just don't sit still!