The 'Who Owns My Heart' singer was reported to be in talks with Fox executives in July, just prior to the announced departures Jennifer Lopez and Steven Tyler as Idol judges.
An informant has now told E! News that Cyrus was briefly tipped to join American Idol and even entered into negotiations.
The talks reportedly stalled quickly and Cyrus was dropped for the serious list of contenders some time ago, according to the insider.
Mariah Carey is the only judge confirmed to appear on American Idol's new season thus far. She is said to have reached a $17m (£11m) deal with the show's bosses.
Nicki Minaj is also said to be days away from signing an $8m (£5.06m) contract to join the panel, despite rumours that Carey allegedly disapproves of the 'Starships' singer.
Carey publicly recommended Lenny Kravitz to American Idol bosses in a Twitter message earlier this week. It's unclear if Kravitz is actually being considered by Fox executives.
Nick Jonas, Kanye West, Snoop Dogg and P Diddy have all been linked to the show's judging panel in recent weeks as well.
American Idol returns to Fox in 2013.
Watch Miley Cyrus's 'Who Owns My Heart' music video below: