I've seen the fuzzy cozy huts & cuddle buddy things, I'd wondered if cockatiels actually use those.
Those can cause hormones to increase and birds to lay eggs or become super territorial. The only time a tiel needs an enclosed space is when they are breeding, which is why those type of things are an issue.
You could try hanging a piece of fleece in the cage at night, near his favorite perch if you feel he really needs something but honestly I think he'll be fine without.
Thanks DallyTsuka for siggy!
Snowball-whiteface cinnamon cock
Jeep-normal gray cock
Pebbles-whiteface pearl pied hen
Pankakes-PF cinnamon pearl pied cock