His late goal was enough to finish off Nigel Pearson's side after a grim first-half stalemate turned into a hotly contested second period.
It took 29 dreary minutes for the first chance to arrive when Barnsley's Nathan Doyle galloped forward and slid a neat ball to Iain Hume who was making his first start since October.
As Hume sized up an angled shot, Wayne Brown produced a superbly timed tackle six yards out to block the Canada international's shot.
The home side were in a panic at the back when Leicester burst forward again and caught out Barnsley but when Dany N'Guessan crashed a shot with Luke Steele stranded it struck Stephen Foster.
Leicester had keeper Chris Weale to thank as he palmed away with both hands when Darren Moore stabbed a goalbound shot after a Hume's corner.
Just before the break Leicester missed a glorious chance to snatch the lead when Chris Powell powered his header wide from Paul Gallagher's cross.
Seconds before the break Leicester's first threat on goal came when Richie Wellens hit a 25-yard dipping shot that Steele saved.
Two goal-line blocks by Matt Oakley denied Barnsley the lead as they stepped up a gear early in the second half with Ryan Shotton and Foster producing headers that seemed certain to find the net.
As the home side kept up the pressure Adam Hammill crashed in a long-range shot that brought a fine save from Weale.
And when Hume's pace took him through two challenges into the area he squeezed his shot just wide and a mazy run by Anderson de Silva into the area almost paid off but his shot was blocked.
At the other end a goal-line block by Shotton denied N'Guessan when he drove a low shot in from the edge of the area.
Barnsley finally broke the deadlock after 77 minutes when Hume's corner was headed down by Andy Gray with his first touch after coming off the bench. Weale parried it and Colace pounced to finish from close range.