The former judge will apparently give the girl band a record deal worth millions of pounds regardless of whether they win this weekend's final and plans to make them stars in the US as well as the UK.
Little Mix will tour with One Direction to kick start their career and Cowell has recruited top writers to work on new material for the band, according to The Sun.
A source said: "Simon is thrilled by the quality of this year's finalists - but he's extra excited about Little Mix. He genuinely believes they could be bigger than the Spice Girls. He's had huge successes in his career but a massive girl band has not really been one of them.
"Simon is extremely competitive and would love it if he could beat his old rival at his own game. The Spice Girls set the bar high but Simon thinks there's no reason Little Mix can't better them. They are young and they work phenomenally hard, so the sky's the limit.
"There hasn't been such love for a girl band in years. Even Girls Aloud didn't have the initial buzz on Popstars: The Rivals that Little Mix have had. Simon will watch the final via satellite in Los Angeles. He has been showing all his industry pals there clips of Little Mix, saying, 'Watch out for these girls - they're going to be massive'."
Little Mix have previously told Digital Spy that they want to be a modern Spice Girls.
"The Spice Girls all had individual personalities and girls can relate to a different one," said Perrie Edwards. "I think they were approachable as a girl group and you wanted to be their friends. That's what we want to go for."
Digital Spy readers have also predicted that Little Mix will win The X Factor, with the band securing over 51% of votes in our survey.
Baby Spice Emma Bunton has backed the girls to win The X Factor, saying: "I think they're brilliant to watch and I think they could be really big. They work well together and they've got a great connection. I can see they are having fun and that's what it was like for the Spice Girls. I can see they've got that edge too."