The 11-4 favourite with the sponsors for the three-mile feature has thrived since reclaiming the Betfair Chase last month, according to the champion trainer.
And he is confident that he can defend his title after beating Cue Card by three-and-a-half lengths in the same race last season, providing the rain arrives.
Nicholls said: “He is in the form of his life. He will be a bit better this year. We’re looking forward to the big day.
“He’s a typical Dom Alco, they are not morning glories. He shows you nothing at home – he never did before we first ran him. You know what you have got with him on the track. What we would want is plenty of rain. Kempton on good ground is not ideal for him.
“He is in the Lexus still and he might go there yet. If you had a dry three weeks, and the ground was good or even faster at Kempton, you would be seriously concerned about it, but if it keeps on raining, if it is soft, it is ideal for him.
“Last year’s race was on soft ground and it was test of stamina, which suited him.”
Nicholls may also run Al Ferof, who slammed Somersby by seven lengths in soft ground at Ascot in the Amlin 1965 Chase last month.
He said: “That was obviously a career best at Ascot and that form has worked out really well. For whatever reason he seems to be better than he was last year.
“He had a few problems with ulcers and he came back from a leg.
“Sometimes horses take a while to get over them to come back to their very best.
“To be honest, I said he would need the run the other day and he didn’t come back to me until September 10 and he hadn’t done a lot of work before then. He can only improve for that run, and that was top-class form the other day. The biggest issue with him is will he get three miles if it is really soft ground?
“It is difficult isn’t it, because it was two-mile-three at Ascot. You would have to say how would he have run in the Tingle Creek with a run? He would not have been too far away because he is not short of pace.”
Al Ferof was beaten 25 lengths by Harry Topper in the Denman Chase at Newbury in February in heavy ground before finishing fifth, beaten just under eight lengths, in the Ryanair Chase at the Cheltenham Festival.
Nicholls said: “Admittedly, Newbury last year was very testing ground and I was just trying to see if he would be able to go for the Gold Cup or not.
“Sam Twiston-Davies is going to ride him. He was at Haydock to ride The New One, otherwise he would have ridden him at Ascot. He has schooled him, he knows him and that won’t be a problem.”