While there is a lot of discussion about how to get new spells and what spells should be like, I haven't seen anything about how spells could be improved once you have them.
I can think of two ways: research or 'leveling' them up through use.
I don't think research would be a good idea because it would prevent you from getting new spells. The upgrade to an exsiting spell would have to be large to delay getting a new spell.
The second way would be very interesting as it could be implemented several ways.
The most basic way is for the spell to 'level up' after a certain amount of uses. There could also be an option to pay the casting cost and have it count as a use even if the spell is not used(say improving a battle spell while you don't have anyone to fight). This would basically be practicing the spell.
The harder way to implement it would be for the spell to gain XP based on how it is used. Using it to kill a unit would give more XP than just damaging it. Trying to deal the killing blow on a unit with a spell could become a mini-game of sorts if you want the most XP.
Next is the question of how a spell would be improved when it 'levels up.'
The most basic way would be giving it a fixed % percentage increase in what is does(say damage for combat spells and duration for temporary buff spells).
The more complicated(and I think better way) would be having the player decided what to improve about the spell. A spell could be made cheaper to cast or deal more damage. The % of the bonuses could increase based the level the spell is. For example: early on it could be a 1% increase in damage, at a much higher level it could be a 5% increase in damage.
Every certain amount of levels there should be a major choice that has to be made. An example would be a % increase in damage of all spells that same the same element as the spell that leveled up or a decrease in the cost to research spells with the same element.
At very high levels(or maximum level if there is a level cap on spell level), there could be a game changing decision to be made about the spell. An example is deciding bewteen the ability to cast the spell for free, or the ability to 'multi-cast' it(the spell is cast twice every time you use it). The idea is for this game changer to require so many levels to get it would be very rare to get even in long games.
I think being able to upgrade existing spells would add a lot of replay value to the game. You could go for cheap spells if you have a game with low magic or powerful spells if you have plenty of magic.