The Olympic bronze medallist will line up alongside Olympians including Jessica Ennis and Mo Farah on the talent show's 'Olympic Week', according to The Sun.
The diver is also apparently being considered for a permanent presenting role during the live shows.
A source said: "All the athletes are keen to be involved. But Tom is keenest by far and he makes a really good match for X Factor's core audience of teenage girls.
"Tom is great on the telly and he'd really like to get involved in all the live shows in some way. Ideas being kicked about at the moment include making him a roving reporter.
"He could take the contestants out and about to film or to be their personal trainer. He's keen to work with Dermot. He reckons he's the best in the business."
> Have we seen enough of Tom Daley? - Poll
Daley may reportedly earn up to £100,000 for his stint on the ITV show. Contestants will sing Olympic-themed tracks during the special tribute week.
Bradley Wiggins was previously linked to an appearance on the show, but later dismissed the claims. Sir Chris Hoy has also denied any involvement.
Jessica Ennis has stated that she would "definitely" be willing to appear in some capacity on the programme.
Photo gallery - The X Factor episode 2: