Inspired by a few other threads going.
Queen mentions Jimi Hendrix in The Miracle and Mott The Hoople in Now I’m Here.
Paul Simon mentions Johnny Ace,John Lennon,The Beatles and The Rolling Stones in The Late Great Johnny Ace.
I know more, but will stop here for now.
Charlie Daniels’s thing about “the South’s gonna do it again” (don’t have the exact title on hand) mentioned almost all the Southern Rockers of the day.
Eric Burdon mentions various players at the festival in The Animals’ “Monterey.” The Who, The Grateful Dead, Brian Jones, Jimi Hendrix, etc.
Van Morrison’s song, “Jackie Wilson Said.”
And there’s that horrible dreck, “Rock And Roll Heaven” by The Righteous Brothers.
“Sweet Home Alabama” – Neil Young
David Allan Coe’s “Willie, Waylon and Me” mentions the Flying Burrito Brothers, the Byrds, the Eagles, the Beatles, the Rolling Stones, Janis Joplin, Bob Dylan, and (of course) Willie Nelson & Waylon Jennings.
You had it…exactly! 
Billy Joel’s We didn’t start the fire has Liberace, Elvis, Toscanini, Buddy Holly, the Beatles, and Bob Dylan.
Barenaked Ladies - Brian Wilson
Charlie Daniels Band - Reflections
James Taylor’s “Fire and Rain” mentions Flying Machines, his first band.
Deep Purple’s “Smoke on the Water” cites “Frank Zappa and the Mothers”. Zappa himself referred (disparigingly) to the Grateful Dead in “Teenage Wind”, Jimi Hendrix in “We’re Turning Again”, and no doubt others too numerous to mention.
John Lennon in “God” and “Glass Onion.”
Elvis, Zimmerman, and Beatles in the former and Paul in the latter.
John Cougar Mellonhead mentions several in his R.O.C.K in the U.S.A.
“There was Frankie Lymon, Bobby Fuller, Mitch Ryder (they were rockin’)
Jackie Wilson, Shangrilas, Young Rascals (they were rockin’)
Spotlight on Martha Reeves, let’s not forget James Brown”
“Sweet Soul Music” by Arthur Conley gives “Hats off” to Lou Rawls, Sam & Dave, Otis Redding, Wilson Pickett, and James Brown.
Frank Zappa did it a lot. “We’re Turning Again” mentions Jimi, Janis, “that other guy Jim” [Morrison], “Big Mama” [Cass], Keith Moon, and Donovan. “Magic Fingers,” “Titties and Beer,” and “Punky’s Whips” all mention Jeff Beck, although the last is primarily concerned with Punky Meadows of Angel. “Teenage Wind” mentions the Grateful Dead. “Billy the Mountain” incorporates a “Suite: Judy Blue Eyes” parody that mentions [David] Crosby, Neil Young, and Joni Mitchell. “Dental Hygiene Dilemma” mentions Donovan, Grand Funk, Black Sabbath, and Coven.
ETA: Dad gummit, I even previewed and Thing Fish’s post wasn’t there yet!
The Who mentions T Rex in “You Better You Bet”.
Molly Hatchet names a few southern rockers in “Gator Country”.
Richard Thompson mentions The Clash in “Tear-Stained Letter.” Lyrics would have been better if he hadn’t, though.
“Brenda Lee’s comin’ on strong” in “Radar Love,” by Golden Earring.
That reminded me of one, Elton John sings about Brian Wilson in Since God Invented Girls
R.E.M.'s “Man on the Moon” name-checks Mott the Hoople
The Mamas and the Papas’ “Creeque Alley” mentions Roger McGuin and Barry McGuire “still a’gettin’ higher” and “no one’s gettin’ fat except Mama Cass”
Since I already mentioned Frank Zappa mentioning Donovan (in two different songs), how about Donovan mentioning Jefferson Airplane in “Fat Angel”?