Both of these aren't song namechecks, but artists...
I think that the epitome of namechecking other artists in a song is probably Sir Duke by Stevie Wonder. 🙂
But one that has always stuck in my memory is from Monkey by Counting Crows, which says, "Got nowhere but home to go, got Ben Folds on my radio."
Also, in Straw Hat and Old Dirty Hank by Barenaked Ladies, which is about Anne Murray's stalker, references two of her songs within the lyrics. "I cried a tear, you wiped it dry, I put you up, up, on a pedestal so high" references "You Needed Me." The other is "spread my tiny wings and fly away," which references "Snowbird".