The 11-year-old singer, best remembered for breaking down in tears after forgetting her words on the show, is reportedly keen to compete against the X Factor winner in the festive chart.
According to The Sun, Steel has used the money she earned on the Britain's Got Talent tour to record an album. It is expected to be released online before the end of the year, while her mother is also looking for a sponsor to help get the project into shops.
Mum Nina told the newspaper: "We're doing this for her because it's what she wants to do and she's got all these songs she wants everybody to hear.
"It's a really special experience for an 11-year-old to go into a recording studio, but she just takes it in her stride and is still the same Hollie."
Steel's experience on the ITV1 show led to a debate over whether young children should be allowed to take part in televised talent competitions.