The X Factor creator told Piers Morgan's CNN chatshow that he had received the unusual offer while in Los Angeles shortly after becoming famous for his role on American Idol in 2002.
"He offered me $150k (£92,000) to criticise him bonking his wife," Cowell explained. "The crazy part of the story is I said no."
The 51-year-old joked: "If you're watching, I'll even do it for $50k (£30,700) less - we'll do a deal."
Explaining why he turned down the opportunity, Cowell said: "He was taking it quite seriously and I knew I would laugh. I just thought, 'No this is too crazy', but I genuinely regret it now."
Cowell also admitted that he had turned down the opportunity to become a spokesperson for Viagra, adding: "The best form of Viagra is being on TV."
Also in the interview, Cowell spoke about his relationship with his late father, saying that he is "thankful for all the support and advice" he received from him.
Watch a clip of Simon Cowell on Piers Morgan Tonight below: