Tarik Chadlioui twice met six suspected extremists at a mosque in Mallorca in 2014 and 2015.
He is accused of being the spiritual leader of the cell and of using the internet to recruit jihadis.
The preacher allegedly posted a propaganda video on social media called “Tufiq Went To Syria”.
Chadlioui, 43, denies the allegations and is fighting attempts to extradite him to Spain.
The father of eight was arrested at his home in Birmingham last week.
Perfume salesman Chadlioui is suspected of radicalising Omar Mostefai, 29, who blew himself up during the terrorist outrage at the Bataclan theatre in Paris, which claimed 89 lives in 2015.
Carl Kelvin, prosecuting, told Westminster magistrates Chadlioui belongs to an “organised group that appears to centre around the Al Fagar de Inca mosque in Mallorca.
“In 2014, it is known that he travelled out to that mosque and again in 2015 he went back to Majorca.
“It appears a series of three videos were made with the title ‘Tufiq Went To Syria’. The purpose of these videos and other material posted online by Mr Chadlioui, together with others, was to encourage radicalisation and for others to be prepared to become jihadist fighters.”
Chadlioui, who was born in Morocco, has been living in Britain with his wife and children since 2015.
He previously lived in Belgium and could settle in the UK as he had a Belgian passport.
Saba Ashraf, defending, said: “Mr Chadlioui denies the videos are used to indoctrinate or recruit jihadis.”
Judge John Zani remanded Chadlioui in custody.
His extradition hearing is set for September.
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