Rocker will be at two shows during the audition process.
Auditions begin on Wednesday (23.05.12) in Liverpool and the 'I Don't Want To Talk About It' singer is expected to be on the panel for two show.
A source told the Mirror: ''Rod is a genuine living legend and exactly what the show needs.
''The details are still to be ironed out but it looks like he'll be at the auditions next month in London and possibly Glasgow because of his Scottish heritage.
''He's sold more than 100 million records worldwide so he knows exactly what it takes to succeed in the tough world of showbusiness, and hopefully he'll also be a big draw for viewers who might not have been fans of 'The X Factor' before.
''It's a big coup to get him involved and Simon Cowell is absolutely thrilled.''
Apparently producers were planning on recruiting Katy Perry with a 6-month contract following her 2010 stint on the show but left it too late.
The source added: ''Katy was a big hit with viewers when she appeared on the show, but Simon didn't act fast enough to land her for this year.
''Simon had put all his eggs in one basket with Dannii Minogue, and now everyone is scratching their heads wondering who they can get.''