The former Foxes striker scored 294 goals in his seven-club career.
Speaking to The Daily Mirror, Cottee referenced Vardy's rise from non-league.
“Jamie Vardy has been one of the biggest success stories that the English game has ever seen," he said. "It’s incredible this is a fella who, Sheffield Wednesday said, wasn’t good enough."
The ex-Hammers, Foxes and Everton striker went on to say how Vardy is an example for every young footballer to follow.
"The way Jamie Vardy has rebuilt his career, coming up through non-league to now be playing for England and within touching distance of a title medal, has given hope to every young boy who dreams of, one day, being a professional footballer," he added.
Cottee feels as though the PFA Player of the Year award should be foregone conclusion:
“He just has to win the player-of-the-year award, hasn’t he?”
The former Fleetwood Town man has been a major part of what could become one of the greatest footballing stories of all time. He has played in all 33 of Leicester's Premier league games, scoring 21 goals, and chipped in with six assists.
Cottee finished of by highlighting Vardy's wonder strike against Liverpool and his goals for England as reasons as to why he should win the award.
“This has been Jamie Vardy’s season, for me," Cottee said. "His goals have taken Leicester to the top of the league, he scored one of the goals of the season, with that volley against Liverpool, and he has scored for England against Germany and Holland."
Leicester fans will be hoping that Vardy can continue his form and drive the Foxes to the league title in the remaining games.