Simon Settles Lawsuit with Arch Nemesis

The personal chef who sued Simon Cowell and Terri Seymour just hit the smallest jackpot we've ever seen in a celebrity lawsuit -- a pair of old sneakers and some gas money!

As TMZ first reported, the chef filed suit against Simon and Terri earlier this month, claiming the "American Idol" judge wouldn't return her running shoes -- equipped with $500 orthopedic insoles. The chef claims Terri made her remove the shoes before entering Cowell's Hollywood Hills mansion.

But yesterday, Team Simon and the chef reached a settlement -- the chef got her shoes back ... plus around $75 in court costs ... and $9 for the gas!

We just spoke to the chef, who told us, "I got my shoes back ... yayyyyyyy!"

Case closed.