More than 70 million people voted in the live final, handing Sparks victory over rival Blake Lewis, 25.
Her prize is a recording contract with Sony BMG.
Singer Smokey Robinson, who performed on the show, said of Sparks, "She sings so good, it's hard to believe that she's 17.
"To sing like that, you would have to have lived for a long time. She's an old song."
Cowell predicted Sparks' victory after her performance of This Is Now, on the show, saying, "If I'm going to call it, based on the last song, congratulations Jordin.
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Gwen Stefani, Tony Bennett, Bette Midler, Green Day, Gladys Knight and previous American Idol winners including Kelly Clarkson also performed on the final show.
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