Jessica Adams makes an obvious Squeeze reference in her novel "Cool for Cats", set in 1979, proving that you can make a chick lit book out of any topic (and it's a Brit chick lit book, to boot). The book is apparently about the relationships of a woman obsessed with pop music. Unfortunately, if it's set in '79, she misses some of Squeeze's best albums. On the other hand, the protagonist would have been able to catch our boys in local clubs. Among Ms. Adams' other titles: "Tom Dick and Debbie Harry," "I'm a Believer," and "Single White E-mail."
I'll stick wih Nick Hornby, but if "Cool for Cats" turned up while I was shopping, I might pick it up. I hope that doesn't make me a snob. If you're looking for other Squeeze references in books, Brett Easton Ellis mentions them a couple of times in his really bleak but quite good novel "Less Than Zero."