The 'Heart Attack' hitmaker finds it hilarious that the music mogul is so obsessed with his appearance, and she claims he can't seem to part with his beloved shades even when he's indoors, but insists she wouldn't change a thing about him because that's just who he is.
Demi - who is a judge on 'The X Factor' USA with Simon - jokingly said: "[He is] Definitely [vain]! He wears his sunglasses indoors. It's funny. It's part of who he is."
"And he's always blow-drying his hair."
Demi has overcome troubles in her past - including beating an eating disorder and self-harming - and admits she has developed such a close bond with Simon, 53, since appearing on the TV talent show she has been able to tell him even deeper things from her past that no one else is aware of.
In an interview with The Sun newspaper, she explained: "I've been able to tell him things that I don't tell the public - about my personal experiences, my journey and what I've been through. He's been really, really cool about everything. Way deep down there, he's a good guy."
The 20-year-old singer also insists Simon isn't actually as nasty as he comes across on the programme and although he's quite blunt with contestants, she claims he's a really great person to work with, even though he teases her and the rest of the judging panel - which previously included Britney Spears and L.A. Reid.
She said: "Working with him is really great. He's a really, really cool guy, not what people expect, I think. He's not as mean as he comes across."
"He teases us for sure. Just watch the show. You'll see, he's constantly teasing me."