The champion trainer has not saddled a winner at the showpiece meeting since the Queen Mother Champion Chase with Politologue three years ago, but will return to the Cotswolds with high hopes for the likes Ballymore Novices' Hurdle ace Hermes Allen and Gold Cup contender Bravemansgame.
The Ditcheat team claimed eight winners in the first nine days of March and Iceo continued the hot streak with victory in the traditional feature the weekend before the Festival.
The French recruit ran with promise in a couple of Grade Two juvenile events last season and finished second on his handicap debut at Sandown in January, his first appearance in 11 months.
The four-year-old was 5-1 for this tougher assignment and while the front-running Knickerbockerglory looked likely to prevail halfway up the home straight, Iceo reeled him in between the final two flights and was ultimately good value for the winning margin of just under four lengths.
Nicholls said: "He ran well here a couple of months ago having been off for a year with a tiny fracture on his cannon bone. We had to give him time and he needed that run. I said one race we will aim for is the Imperial Cup and pray it rains.
"The rain came for him, he stays strongly and it was the perfect ride. Today was always the plan and Chris (Giles, owner) has been backing him all week. If the ground would have been good they might have gone too quick for him. He wants a trip really.
"I thought he would finish fifth or sixth the last day and it looked like he was going to win jumping the last but he just got tired. At the stage of fitness he was there I knew there was huge improvement to come. I knew we had him right today."
Iceo is entered in the County Hurdle and the Martin Pipe Conditional Jockeys' Handicap Hurdle at Cheltenham on Friday, but he appears unlikely to make a quick return.
"Looking at him there I'd say going to Cheltenham is unlikely as Harry said he had a hard race. We are not chasing any bonus," Nicholls added.
"Chris would love to have a runner at Ayr so if the Scottish Champion Hurdle was testing ground we could run him there."