The new dad, 54, revealed took Cheryl, 30, out for dinner before offering her the chance to appear on The X Factor judge again.
“I think she looked and sounded the best I’ve seen her in years. She’s in a much better place than I’ve ever seen her before,” he told Now magazine.
Music manager Simon also praised Cheryl’s ability to stay in the public eye, adding: “We both need each other. She’s still in the papers; that’s the interesting thing about her.
“She hasn’t been on TV for three years but if she peels an orange, she’s in the papers.”
Cheryl appeared as a judge on the British version of the talent show for three series’, before moving to The X Factor USA, before she was sensationally fired.
But Simon praised Geordie Cheryl’s judging skills, saying: “She’s a good judge – a really good judge. What she did with Cher Lloyd – no other judges would have done that.”
Meanwhile, Simon has publicly defended One Direction following a leaked video which allegedly shows two of the members smoking a joint, insisting they are ‘not monsters’.
He told BBC Radio 2: “They really are hard workers, they really like their fans, they're really respectful. They are amazingly nice boys considering how much their lives have changed.
“They do get rest periods and they are treated well, but it’s a tough job, I’m not going to deny it.”