Darius Henderson scored on the brink of half-time to keep 10-man Watford one point clear at the top of the Championship table.
Henderson celebrates the game-winning strike with Danny Shittu
Things looked bleak for Watford on 40 minutes when John-Joe O'Toole was sent off for tugging back Stephen Clemence.
But two minutes later, Henderson - who had earlier blazed over when presented with a great chance - was on hand to prod in from two yards.
Jobi McAnuff also went close as Leicester failed to make an impression.
Watford manager Adrian Boothroyd on O'Toole's red card:
"From what I can gather from my staff there was a covering defender in Leigh Bromby. The referee was in a great position and didn't give anything.
"Then the bloke waving aeroplanes in on the far side decided he should go for some reason.
The chairman will not be happy - we've lost three in a row and I'm paid to win games
Leicester boss Ian Holloway
"I will be putting that in my report and go through the right channels but I will be looking to appeal against that.
"Until the sending-off we were the stronger team but when you go down to 10 it's about digging in and putting your body on the line.
"We limited them to a few long-range efforts and corners so credit to my players.
"It's one of those results that gets everyone back on track. It's an emotional night which keeps the crowd behind us and we have to build on that."
Leicester boss Ian Holloway:
"The chairman will not be happy, I know. We've lost our last three games, I'm a manager and I'm paid to win games but I accept that.
"It's a big, tough club to play for and for people who have come down from the Premier League it's hard to be playing for a club playing near the bottom.
"I don't think they envisaged it but if you're a victim, your luck won't turn."
Watford: Lee, Mariappa, Shittu, Bromby, Sadler, Eustace, Ainsworth (Bangura 45), O'Toole, McAnuff (Kabba 90), Henderson, Ellington (Stewart 61).
Subs Not Used: Doyley, Williamson.
Sent Off: O'Toole (40).
Goals: Henderson 45.
Leicester: Alnwick, James Chambers (Laczko 46), Stearman, McAuley (Hayles 81), Kisnorbo, Clapham, Oakley, Clemence, Campbell, Bori (Hume 67), Howard.
Subs Not Used: Wesolowski, N'Gotty.
Ref: Andy Penn (W Midlands).