The choreographer, who briefly judged alongside Osbourne in her final series in 2007, said that he believes the 60-year-old's departure from America's Got Talent is a sign she will be back.
"It's funny, I was watching TV here in America and I'm used to having her on America's Got Talent," he said. "It leads me to believe that she's got to be back in the UK.
"I could definitely see it happening and who better to come back? She knows the show so well, she helped launch it, she was part of the original. So if there's a back to basics [approach], she's definitely the person to bring back."
Asked if he approves of the return of the X Factor audition rooms, Friedman said: "It keeps the audience on their toes, you never want to give them what they expected to see.
"There is something I loved about those early auditions because it's a lot more scary to stand in front of four people in a room that's quiet than it is to go on a stage with a bunch of people... I'm a fan of the cold, quiet room."
However, Friedman argued that scaling back The X Factor's musical productions "would be detrimental to the show", commenting: "It's Saturday night, everyone wants to see a spectacle."
Friedman also admitted that he originally wasn't a fan of Rylan Clark, who gave him some of his biggest creative challenges of last series.
"When I first watched his auditions I didn't like him. I thought that he was just a lot to handle," he said. "[But] when I got to London and had cut off the blonde hair I just fell in love with his personality."
On whether he believes Clark will ever ditch his TV work and return to music, Friedman noted: "Jennifer Lopez took a detour and went into acting and it was a while before she realised an album. I'm not putting him on the same level as her, but you go where opportunity is.
"I think people would much rather watch him host a show than put an album out. I'm sure that he's going to dabble in music, that's how he got [famous], that's what he loves. He's passionate and he loves to perform. He'll find a way to do it."
Friedman will return to the UK later this month with The Pulse, a touring dance masterclass where unknowns get to perform for otherwise "untouchable" choreographers. The star and his partner became legal guardians to a 15-year-old male dancer he met at the event in America.
"It's a win-win for everyone, because we're getting the hot next new thing and they're getting their dreams coming true," he said.
"It's really incredible. I mean, I found my son at The Pulse... He is homosexual as well and coming out of the closest at the age of 15 is a huge thing to do, to live in a small town where there's no-one around you who understands.
"I saw his struggles and he spoke to me about them. I wanted to give him a nurturing home where he could feel safe and peak. Little did we know that he was so brilliant."
Friedman, Cris Judd, Carmit Bachar and Laurieann Gibson will be at London's Olympia on April 20/21 for The Pulse On Tour.
Photo gallery - last series's X Factor after-party: