Chris Burke marked his return to the Birmingham squad by scoring a last-minute penalty to secure a 2-2 draw at the King Power Stadium and deny Leicester a spot in the Championship play-off places.
Victory would have seen the Foxes edge into the top six ahead of the weekend fixtures, and it looked like Nigel Pearson's side were going to end their eight-game winless run after Jeff Schlupp headed them back in front.
But substitute Burke, back after a three-game absence with an ankle injury, kept his cool from the penalty spot to snatch a point for the visitors.
The equaliser was a controversial one as replays showed David Nugent's foul on Wes Thomas, coming after an horrific misjudgement from the former Preston and Portsmouth striker, occurred fractionally outside the area.
Curtis Davies' own-goal saw Leicester take an early lead but Nikola Zigic equalised just after the hour.
The result leaves the Foxes in seventh place with only one win from their last 13 league matches.
The opening goal came following a swift counter attack. Wade Elliott's corner was cleared by Danny Drinkwater and controlled brilliantly by Chris Wood inside the centre circle while under pressure from a couple of defenders.Wood slipped a pass into the path of Nugent, whose 25-yard effort had to be turned behind by Jack Butland.
From the resulting corner, Matty James' cross was headed in by the stooping Davies as he attempted to prevent Wes Morgan from getting to the ball.
Schlupp was presented with a chance to make it 2-0 in the 21st minute when Paul Robinson's header back to Butland dropped short but the England goalkeeper was quickly out to block Schlupp's shot.
Leicester were on top and another James corner was met by Michael Keane on the run but the on-loan Manchester United centre-half powered his header narrowly over the crossbar from eight yards.
Andy King then created a chance for himself after chasing down his own header behind the Birmingham defence but Butland smothered his shot from inside the box.
It was becoming one-way traffic but, in the 26th minute, Blues provided Leicester with a reminder that their lead was a slim one.
Nathan Redmond cut inside from the right and forced Kasper Schmeichel to turn his low shot round the near post.
Schmeichel repeated the feat two minutes later after Redmond's quick feet created space for him to get a shot away from inside the box.
The Foxes goalkeeper then brilliantly blocked Robinson's far-post volley from the resulting corner.
Back at the other end, Nugent dragged a shot wide from a good position down the right-hand side of the box just before the break.
A last-ditch sliding block by Davies just outside the six-yard box diverted Schlupp's goalbound shot out for a corner eight minutes after the teams re-emerged.
Elliott then curled a left-foot effort narrowly wide of the far post from the right side of the area as Birmingham continued to have their moments.
And they had a moment that really mattered after 61 minutes, scoring a well-crafted equaliser.
Redmond and Paul Caddis carved Leicester open down the right, with the latter providing a low cross which Zigic tapped in from close range
Schlupp was the width of a post away from restoring the host's lead shortly afterwards when his fierce left-foot shot struck the upright.
The Ghanaian did put Leicester back in front after 75 minutes when he rose unmarked to head home James' corner.
It looked to be enough for Pearson's side until the ball bobbled back into the area off Nugent who then tripped substitute Wes Thomas.
The referee pointed to the spot and Burke stepped up to level it up once more.