"What it indicates, if anything, is a maturity about getting prepared for Government," Little said.
Until now, Little has said Labour and the Greens' Memorandum of Understanding ends on election day.
This arrangement still leaves the door open to the Greens being cut out of any coalition by Labour and New Zealand First, as they were in 2005. At the time, Peters made it clear that he would prefer the Greens were not involved.
Little had to nominate an Opposition MP to replace former Labour MP David Shearer, who left Parliament to take up a United Nations post in December.
The five-person Intelligence and Security Committee provides oversight to the NZ Security Intelligence Service (SIS) and the Government Communications and Security Bureau (GCSB).
Little said Peters, a former Foreign Minister, would be a valuable addition to the committee because of his "extensive experience" of New Zealand's security and intelligence agencies.
The other members on the committee are Prime Minister Bill English, SIS and GCSB Minister Chris Finlayson, and Justice Minister Amy Adams.
English said today the nomination of Peters was "certainly preferable" to a Green MP.
He said Peters was familiar with security issues and would take a "responsible attitude" to them.
"Some of the Opposition parties don't believe in security and intelligence. Winston Peters does, and it's the right thing."
Little said he did not agree the Greens were unfit for the committee, and he wanted it to be expanded to better reflect the makeup of Parliament.
His party is drafting an amendment to spying reforms currently before Parliament which would allow any party with "significant representation" in Parliament to have a MP on the committee.
This would require the committee to grow to nine members.
Nominations to the committee have previously been a sore point for the Greens, especially after Little replaced former Green co-leader Russel Norman with former MP David Shearer in 2015 without consulting the Greens.
But on this occasion, Green Party co-leader James Shaw was not overly bothered by the party's exclusion.
"There's just six months to go until the election, and we've got other things on our mind right now."
Shaw said he hoped the committee could be expanded to include the Greens in future.