Grant Leadbitter and Connor Wickham found the net for Town but Blues ended the season on a losing but entertaining note at the Walkers Stadium.
David Norris and Jason Scotland should both have scored for Town before Leicester opened the scoring through Andy King midway through the first-half.
Strikes from Yakubu and Yuki Abe in the last five minutes of the half put Leicester in command at the break but two goals in two minutes from Leadbitter from the penalty spot and Wickham pulled Blues right back into the game, only for Diomansy Kamara to score before the celebrations of the Town fans had died down.
A run of skill and strength from Wickham in added on time almost brought a third goal for Blues, his shot going inches wide of the far post.
Town made five changes to the side that beat Preston last weekend, with Gareth McAuley one of the returning players, lining up against his former club.
The Northern Ireland international cleared from Patrick Van Aanholt in the opening seconds but it was Blues who should have opened the scoring on two minutes, Norris sliding the ball wide of the past when clean through after Miguel Vitor had given the ball away.
Van Aanholt fired wide, Yakubu sent a shot over the bar, the Nigerian international also going close after good work by Van Aanholt.
Abe cleared off the line following a corner, Wickham's follow up shot saved by Chris Weale and the Leicester 'keeper was called into action on the quarter hour when he kept out Wickham's long range effort, then got up to deny Scotland from the rebound eight yards out.
Marton Fulop denied Yakubu after King's surging run before the Foxes got the breakthrough on 26 minutes, King heading in his 15th Championship goal of the season from Paul Gallagher's cross.
The home side were forced into a change soon after, Darius Vassell limping off, Kamara the replacement and on the half hour, Aleksandar Tunchez received a great reception from the home fans as he made only his third appearance of the season after being out with a serious knee injury, the defender replacing the injured Vitor.
Town went close again when Wickham got on the end of a corner and sent the ball across goal with Weale beaten but the ball drifted to safety.
Gallagher was booked for pulling back Carlos Edwards, while at the other end Fulop beat out Tunchev's volley after Van Aanholt had found him with a free-kick.
Leicester finished the half with a flurry though, King hitting the post from Abe's cross, Yakubu on hand to put the ball into the net from the rebound then Abe making it three in added on time from King's pass.
It summed up Town's half that Scotland was denied by Weale seconds before Abe struck and it was the same again as the second-half got underway, Wickham's effort deflected inches wide for a corner, then McAuley's header from the flag kick kept out by Weale from eight yards.
Lee Martin, back in the side after suspension, volleyed over as Town continued to look likely to score, Martin's cross then cleared at full stretch by the covering Abe.
A tricky run from Edwards bought a foul and a yellow card for Jeffrey Bruma midway through the half, Leadbitter's strike deflected wide by the wall.
Josh Carson replaced Scotland in Town's first change, McAuley then seeing a header pushed over the bar before Delaney's header from a corner was judged to have been handled in the box by Bruma and Leadbitter did the rest from the spot.
Bruma was at the centre of Town's second goal on 70 minutes, giving the ball straight to Wickham who beat Weale with an angled finish but Leicester restored their two goal advantage a minute later, good play down the left and Kamara poking the ball in after Fulop had saved superbly from Gallagher's shot.
Jaime Peters replaced Martin, who picked up a yellow card two minutes earlier, then Leadbitter and Kamara were both cautioned after a skirmish.
Richie Wellens made way for Matt Oakley in Leicester's final change, Norris then denied by Tunchev as his shot looked destined for the net, the Bulgarian international then blocking Wickham's close range effort.
Wickham almost made it three in added on time with a surging run before referee Boyeson brought an end to the game and the season.
Leicester: Weale, Naughton, Bruma, Vitor (Tunchev 30), Van Aanholt, Gallagher, King, Abe, Wellens (Oakley 78), Vassell (Kamara 27), Yakubu. Subs not used: Teixeira, Howard, Dyer, Smith. Booked: Gallagher, Kamara.
Town: Fulop, Edwards, McAuley, Delaney, Kennedy, Wickham, Norris, Healy, Leadbitter, Martin (Peters 74), Scotland (Carson 65). Subs not used: Lee-Barrett, Drury, Brown, Civelli, Murray. Booked: Martin, Leadbitter, Delaney
Att: 24, 859