The axed judge suggested that a change in the seating order could prevent further bust-ups on the BBC One ballroom show.
Goodman was seen pointing his finger at Horwood as he lost his temper in Saturday night's episode. The head panellist appeared to be furious after choreographer Craig branded Ricky Groves's latest dance "very conceited".
Speaking to The Sun, Phillips insisted: "It's almost like a personal vendetta, but it's not. Len and Craig work brilliantly together, but they need the net in between them. I think the positioning of the judges is strange."
In previous years, Goodman sat between Phillips and Bruno Tonioli on the panel. However, this year's judging revamp has meant that he now sits with Horwood.
Arlene added: "I think the whole Len and Bruno thing worked, Len and Craig do work brilliantly together but need a cushion between them."
Zoe Lucker became the latest celebrity to be voted off the contest on Saturday.