Spyro: A Hero's Tail
November 3, 2004
In Red's Laboratory there's a friendly robot called Mergatroid which is likely based on Mario, since it has a red shirt, blue overalls and a red cap with the letter 'M' on it.
Additionally the carnivorous plant enemy found in jungle levels is believed by some to be based on Piranha Plants from the Mario series.
The creators of Spyro didn't hold any right over Nintendo's Mario, but the only included subtle references to the series.