Alli signed for Spurs in 2015 after breaking into the first team at League One club MK Dons.
Since then, the 20-year old has gone on to become one of Britain's brightest young talents.
And now James, who left Palace for Luton Town last summer, believes the England midfielder has set a precedent for players.
"In terms of who I have looked up to in the game, I always looked up to James McArthur when I was at Palace," he told Bedfordshire on Sunday.
"But I am a Spurs fan, so I really admire Dele Alli, and he shows all lower league players what you can achieve if you really apply yourself."