The 16-time world champion and all-time great also revealed he felt Littler was handling the pressure that's coming with his newfound mega status but should feel free to say no to some things in order to focus on his darts career first and foremost.
"So far, he's handling the pressure brilliantly, the lad is," Taylor told Spinbet.
"He's bloody brilliant. He's kept his feet on the ground, he's got good parents, a good manager around him and he's doing brilliant – I love him.
"Listen, if you're old enough, you're good enough. It all depends on Luke (on how good he can become). If he remains dedicated and keeps practising and doing what he is doing, then he will be alright.
"It's just if he gets distracted by things, thinking about different things and doing different things and spreading himself a bit too thin. Everyone will want a piece of him, you see. He needs to listen to his manager and keep grounded."
Littler, fresh off his 2024 Premier League victory in his maiden attempt, has already transcended the heights of the sport since becoming an overnight sensation during the World Championship late last year.
His run to the final - then aged just 16 - captured the attention of the country and became national headline news prior to his defeat by Luke Humphries.
The youngster has since gone on to make numerous television appearances on big shows such as Comic Relief and The Jonathan Ross Show, as well as signing several endorsement deals, further enhancing his rising stardom.
He has earned an estimated £600,000 in prize money so far since his rise up the rankings, including £275,000 for winning the Premier League title in May.
But Taylor wants to see the young prodigy properly balance his time between his outside commitments and darts career - something he feels should have no ceiling.
"He needs to now keep his head on and keep doing what he's doing," said Taylor, who won his first world title as a relative unknown in 1990.
"It's one of those things. I had to tell Michael Smith that you can say no to some things.
"Honestly, I can’t believe him. One hundred per cent, he will win a world title, and if he doesn't, then it will be the biggest shame in sport, that's for sure."
And when pressed on whether he would be open to facing 'The Nuke' in an exhibition match, Taylor sounded more than keen, stating that he was currently injured but he "of course would" down the line.
'The Power' also praised recent US Darts Masters champion Rob Cross, who defeated Taylor in his rise to prominence at the 2018 World Championship to win his first world title.
"It was a good tournament all over to be honest with you," Taylor said, himself a three-time winner in 2006, 2007 and 2008.
"I only saw highlights, but I thought it was a good tournament for everybody, they all played well last week.
"He (Cross) was brilliant. I must be honest with you; he was struggling a little bit and then he's bounced back. I think he's got his head down, dedicated himself again. Rob has done brilliantly."
