"I see nothing wrong with transgender," Dickinson told Reality TV World on Wednesday. "I think it's wonderful if the world would catch up to speed."
Isis, a 22-year-old who says she was "born physically male" but "mentally, everything else, I was going female," will compete on Top Model's eleventh season when it premieres September 3 on The CW.
Top Model's cast has consisted of only non-transgender women since the show premiered on the now defunct UPN in May 2003.
However first-season The Janice Dickinson Modeling Agency hopeful Claudia Charriez previously alleged she auditioned for Top Model only to be rejected because she was transgender.
"I made it all the way to the semifinals for America's Next Top Model and was disqualified because of my being a transsexual," said Charriez during one of the Oxygen network show's first-season episodes. "Janice was a judge, and ever since then she's been like a little guardian angel for me."
Dickinson -- who served as a regular member of Top Model's judging panel for its first four seasons -- said she couldn't confirm whether Charriez's transsexual status was the reason she wasn't selected as a finalist.
"I can't state what [executive producers] Tyra Banks and Ken Mok do on their show," Dickinson told Reality TV World.
While Dickinson subsequently auditioned Charriez for a spot on her modeling agency's roster, she said the hopeful came up just short in her attempts to walk the runway.
"The reason why we loved Claudia is because she was qualified and absolutely prepared to be a model," Dickinson told Reality TV World. "It's just her other tools got in the way."
The Janice Dickinson Modeling Agency's fourth season premieres Tuesday, August 26 at 10PM ET/PT on Oxygen.