On a four-match winning run at home coming into the clash, Paul Ince's side went into the interval a goal to the good courtesy of Chris Basham's header.
But Leicester turned the game on its head after the break as a Paul Konchesky penalty and then Andy King's superb left-footed strike put them in front.
Kaspar Schmeichel then bundled over Gary MacKenzie in the 90th minute to concede the penalty and Tom Ince stepped up to score and protect his side's unbeaten start to the season at home.
The Seasiders had lost their top-of-the-table spot with Tuesday's shock 3-1 defeat away to basement club Millwall, which ended their unbeaten start and three-match winning run.
But Paul Ince's men have scored first in all seven previous league games so far this season and so it was against Leicester as Basham rose highest to head home from Ricardo Fuller's cross in the 19th minute.
The visitors came close to an instant reply, though, but Anthony Knockaert's drive from the edge of the box was deflected narrowly wide.
Basham - operating in the unfamiliar role of left winger - was at the heart of all the Seasiders' good work and he fired two half chances over the bar from the edge of the box, midway through the opening period.
As an entertaining first half drew to a close, former Preston striker David Nugent - whose every touch was greeted with a chorus of boos from the home support - dragged a 20-yard effort wide of goal and headed high and wide from a corner-kick, as Blackpool went into the break 1-0 in front.
The visitors emerged for the second period with a renewed sense of purpose and Jamie Vardy ought to have levelled the scores on 55 minutes but he side-footed wide.
Leicester were enjoying the better of the possession and it was then the turn of Nugent to waste another glorious chance when he volleyed into the floor and over the bar inside the box.
But the Foxes were not to be denied for much longer. On 72 minutes Vardy was brought down in the box and Konchesky stepped up to level from the spot, the first goal Blackpool have conceded at home in the league this season.
And things got even better for Nigel Pearson's side just two minutes later.
A loose ball broke to the feet of King, 30 yards from goal, and the midfielder fired a sumptuous effort into the top left hand corner, with Matt Gilks left rooted to the spot.
The home side pushed hard for an equaliser in the closing stages however and finally had their reward when Schmeichel clumsily dragged down MacKenzie and Tom Ince fired his spot-kick down the middle.