The 17-year-old singer's performance of Shakespeare's Sister's 'Stay' was rated as "the best of the season" by Simon Cowell and it has proved popular with punters as well.
Paddy Power has now cut her odds of taking home the crown to 9/2.
A spokesperson for the bookies told DS: "I think it's fair to say Cher Lloyd well and truly pulled it out of the bag on Saturday night.
"Her performance gave everyone goosebumps and she's now right back where she should be - amongst the favourites to be crowned this year's winner!"
Matt Cardle (2/1), One Direction (11/4) and Rebecca Ferguson (5/2) remain Lloyd's stiffest competition.
Meanwhile, Wagner Carrilho continues to upset expectations and is now being backed at 22/1 to win, ahead of Paijie Richardson (66/1), Katie Waissel (66/1) and Treyc Cohen (80/1).