Ipswich kept their unbeaten home record to close in on the play-off places.
Pablo Counago gave Ipswich the lead on 19 minutes after a counter attack when the Spaniard hit home a firm shot, before Iain Hume's lob made it 1-1.
Leicester's Patrick Kisnorbo was then sent off for his challenge on Counago, conceding a penalty scored by Alan Lee.
Midway through the second half Jonathan Walters slid home the ball from six yards to extend Ipswich's lead after a cross from defender David Walters.
Ipswich manager Jim Magilton:
"The players showed terrific character and I was pleased with the response we got after Saturday's defeat at Charlton.
"We passed the ball better and, with better finishing, we may have had more than the three goals we scored.
"It was a big win for us, that is for sure. We needed it to stay on track and in the end we were comfortable."
Leicester boss Ian Holloway on Ipswich's spot-kick:
"It wasn't a penalty. I thought it at the time and I've had it confirmed on a replay.
"It was outside the box and he played the ball. Patrick wasn't the last man so shouldn't have been sent off. The referee was overruled by his linesman and that's like me picking a team and then being overruled by my assistant.
"The whole incident was a complete kerfuffle but the referee thanked me for keeping my dignity afterwards - and that's not easy for someone like me."
Ipswich: Alexander, Wright, De Vos, Wilnis, Sito, Walters (Trotter 80), Garvan, Williams, Haynes, Counago, Lee (Clarke 89).
Subs Not Used: Legwinski, Casement, Rhodes.
Goals: Counago 19, Lee 41 pen, Walters 65.
Leicester: Fulop, Kaebi, McAuley, Kisnorbo, Mattock, N'Gotty, King (Hayes 73), Clemence, Sheehan (James Chambers 46), Fryatt, Hume (John 73).
Subs Not Used: Henderson, Cort.
Sent Off: Kisnorbo (39).
Booked: James Chambers.
Goals: Hume 27.
Ref: Phil Joslin (Nottinghamshire).