Young striker Reece Hales (pictured) fired his side into the lead just 20 minutes into the game. But the hosts struck back with a goal before the break and then sealed the victory with a 76th minute winner.
In a closely fought encounter at the Foxes' Belvoir Road training ground, both sides were intent on imposing themselves on the game and tackles flew in.
But it was Blues who drew first blood as Hales chased down what looked to be an over-hit pass before reaching it ahead of the Leicester keeper and bundling it into the back of the net.
Unfortunately the advantage lasted just 15 minutes, before Blues found themselves pegged back. They gave the ball away from their own throw-in and it culminated in Leicester’s Tom Hopper blasting the ball home from a good 30-yards out.
Richard Beale’s side looked the more likely side to go on and win the game, before Leicester trialist Conor Clifford scored late on with a shot from the edge of the box.
In another positive for Blues, senior midfielder Darren Ambrose completed 70 minutes, following his long stint on the sidelines with a knee injury.
Development boss Beale was extremely pleased with the way his side performed against the table-topping Foxes.
“It was a good game and a very close contest,” he said. “Leicester are top of the table and you can see why. They’re strong and physical and in your face but they go about it in the right way.
“Some teams would go there and get bullied and roll over but we certainly didn’t and we more than matched them. We gave a good account of ourselves and if we’d shown a little bit more quality in the final third we may have come away with at least a point.
“It was disappointing to lose but I can’t criticise anybody for the way they played. I thought young Koby Arthur in particular was excellent and Darren Ambrose played for longer than we thought and did well. He looked fit and strong and hopefully that will now see him back in the first team fold.”
Blues U21s: Nick Townsend, Jack Deaman, James Fry, Mason Watkins, Amari Bell (Demari Gray, 65), Ryan Higgins, Charlee Adams (Liam Truslove, 75), Olly Lee, Koby Arthur, Darren Ambrose (Marcel Henry-Francis, 70), Reece Hales.
Subs not used: Josh Hawker, Callum Preston.