The French champions' supremo claims he saw enough during the recent draw between the sides to know that Carlo Ancelotti's big spenders will not win the league
The French rivals drew 1-1 last weekend at Stade de la Mosson, but Nicollin believes his side were the better team, and that les Parisiens will struggle to top the table come the end of the campaign.
"I do not see them finishing as champions. I would see Lyon finishing first," Nicollin said to L'Equipe.
The 69-year-old was not impressed with the capital club, and thinks that la Paillade would have won had they not seen Younes Belhanda sent off for handball in the second half, thus reducing their man advantage following Mamadou Sakho's early red card.
"It was a good result. But I do not really like what Belhanda did. If he had not been expelled, we would have taken three points because of the way the game was moving," he continued.
"Okay, Paris had 10 players against our 11, but I'm not sure they would have stayed level. I saw a team that is not so serene.
"[Jeremy] Menez gave me his jersey which made me happy! He is the best PSG player, even if there is horse-tail [Zlatan Ibrahimovic]."
Montpellier, who surprisingly won the French league last season, sit 14th in the table this time out.
And despite selling a couple of key players, including Olivier Giroud, Nicollin stated that the southern club should be faring much better.
"During the summer we kept the same team except for Giroud and [Geoffrey] Dernis, and we recruited four players. So I cannot be satisfied with our start."
PSG are top of the table on goal difference, with Olympique de Marseille also on 23 points, while Lyon are just a point back in third place.