Nineteen-year-old Biles rose to fame at the Rio Olympics this summer, dominating the gymnastic events.
She came away from the summer games with 4 gold medals and 1 bronze for the US team.
Time magazine said she made the shortlist of 11 nominations because her Olympic success had proved she was the "best in the world" at her sport.
The Olympian spoke openly about her Catholic faith during the Olympics, telling US Magazine that she was proud to carry a rosary in her bag and attends Mass every Sunday.
The decorated athlete was first introduced to her faith by her grandparents who had adopted her and her sister after their drug-dependant mother could no longer take care of them.
On the release of her autobiography 'Courage to Soar' in November, Biles told The Houston Chronicle that she was comfortable telling others about how her faith had help her overcome her difficult start in life.
"I wanted to talk about family, competition and things like downfalls and injuries so that kids can understand that I go through those things, too," she said. "Kids today talk about faith, and I think it's OK for me to share my faith so kids can see how it helps you through the whole process."
Other Person of the Year nominees include: Hillary Clinton, CRISPR Scientists, Recep Tayyip Erdogan, Nigel Farage, the Flint Whistleblowers, Beyoncé, Narendra Modi, Vladimir Putin, Donald Trump and Mark Zuckerberg.
Past winners include: Mahatma Gandhi (1930), Winston Churchill (1940) and Angela Merkel (2015).