Watford boss Aidy Boothroyd was a relieved man after his table-toppers overcame a controversial decision to send off John-Joe O'Toole.
Referee Andy Penn initially did not act after the Hornets midfielder appeared to tug back Leicester's Stephen Clemence.
But the assistant on the far side Gary Young flagged the incident - and O'Toole was red-carded.
Darius Henderson then flicked home a winner on the stroke of half-time to ensure justice for the home side.
Boothroyd fumed: "The referee was in a great position but didn't give anything.
"Then the bloke who was waving aeroplanes in on the other side decided he had to go for some reason. I will put that in my report and we will appeal.
"I haven't had the benefit of a replay of the sending off yet, but from what I can gather there was a covering defender in Leigh Bromby behind them."
Boothroyd hailed the result as one of his side's most important victories so far this season. Jobi McAnuff, who came close to scoring on three occasions, and Henderson were the Hornets' star turns.
And the Watford boss added: "Darius has set himself some great targets after doing that amount of running. I want to see that every week from now on. Even when he doesn't score he does the ugly things to help us win and he was everywhere tonight.
"He even ended up at centre-half at the end.
All he needed to do was go in goal and save a penalty and it would have been the complete performance. I'm thrilled for the team because these are the results you look back on at the end of the season - it could have gone either way. We have to build on it now."
Henderson's winner was a clever backheel as he converted a Mat Sadler cross five minutes after his side had been reduced to 10 men. But Ian Holloway's dismal Foxes failed to hit a single shot on target - despite having an extra man for 50 minutes.
The closest they came was when substitute Zsolt Laczko fired over the bar.
Yet boss Holloway thought his side played better against 11 men rather than 10 and deserved more from the game.
He said: "The sending off changed the game and lifted the crowd. My lot got a bit nervous against 10 men. It was the last thing on this planet that we needed. We did very well against 11 men.
"The move that we created would have been a goalscoring opportunity - I didn't think he pulled the bloke's shirt and I didn't want him sent off. I just wanted to score from the free-kick. I don't think the chairman will be too happy.
That's three games we've lost now.
"It's a big tough club to play for and for people like Stephen Clemence and Matt Oakley the last thing you want is to leave the Premier League for a club which has slipped down. But I'm a manager and I'm paid to win games and I accept that."