Media have been kept to the perimeter of the centre, located in an industrial area and with a visible security presence.
Asylum-seekers are also held at Villawood, including families. A child's play area was visible through high gates at one area of the complex.
Mr Little said he would meet with four detainees.
"Some of them are repeated shoplifting, repeated drink-driving offences, those sorts of things.
"It's a chance to get a bit of a background of them, their stories, how they have wound up here, and how they are coping with it."
Labour has been strongly critical of the National Government's response to an Australian law change last December, in which non-Australian offenders are sentenced to a year or more in jail, or those judged to fail a character test, are detained and deported.
This morning's visit comes after Mr Little yesterday met Australian Immigration Minister Peter Dutton and was told there would be no change in policy.
He asked for discretion to be better exercised at the point of revoking a visa. One of Labour's key objections to the policy is people who have lived in Australia since childhood being deported to New Zealand.
"This is an issue about Kiwis who have been caught up in a rule that has been applied pretty bluntly... and they don't have any voice - nobody from the New Zealand Government is taking any action to make sure they are being treated properly and treated correctly," Mr Little said.
"There is a practical issue for many of them, which is they don't connect with New Zealand. They may have been born there, but they haven't been there for many years. Their home is Australia."
The only concession made by Mr Dutton - who has refused repeated interview requests from New Zealand media - was that he would look into any individual cases brought to him by Labour.
There has been little domestic pressure put on the Australian Government over its deportation policy - the Australian Labor Party also supports the tougher law.
Centres such as Villawood and on isolated Christmas Island have been used to detain asylum-seekers, but the law change has seen hundreds of New Zealanders - many of whom have lived in Australia since childhood - locked up, while they appeal their deportation to a country some don't remember.
The primary purpose of Mr Little's two-day Australian trip is to highlight the lack of rights an estimated 250,000-350,000 Kiwis living in Australia on "non protected" visas have - including little welfare safety nets, and no automatic path to permanent residency or citizenship.
Both Labour and National-led Governments have been lobbying for change since Kiwis' rights were greatly reduced in February 2001 by John Howard's Liberal Government.
Riots at Christmas Island and the arrival of criminals in New Zealand, including on the so-called "Con Air" flight, have been a major political issue this year.
But, partly because of Mr Little's Australian trip, focus is now switching to the related but wider issue of all New Zealand expats' rights.
While in Manila for an Apec summit Prime Minister John Key told media that he sensed Australian Prime Minister Malcolm Turnbull could move on giving a clearer path to citizenship, as an alternative to changing the threshold at which deportations occur.
Mr Little's visit to Villawood comes after his Corrections spokesman Kelvin Davis travelled to Christmas Island and visited New Zealanders held there, and after Mr Key's accusation that Labour and Green MPs were "backing rapists" caused walk-outs at Parliament.
Speaker David Carter ruled that Mr Key's comments were unparliamentary, but did not make the Prime Minister withdraw them because no MP had complained at the time.
Kiwis in detention or deported
As at October 31, there were 213 New Zealanders in Australian detention centres (190 men, 23 women) - the second-largest nationality group behind Iran. Others have already been deported back to New Zealand, or successfully defended their deportation.
