He allowed a Gareth Williams corner to swing into the net, with a slight touch from Nils-Eic Johansson, in the 11th minute and it was only in the closing stages that Cardiff put the Leicester defence under pressure.
The visitors took control early on and Margetson was forced to dive full length to push an Elvis Hammond shot behind for a corner.
When the flag-kick came over indecision in the home defence saw the ball drift into the net, with Johansson claiming the final touch.
The foxes were spurred on by the goal and the Bluebirds found it difficult to keep hold of the ball as Leicester impressed with neat incisive play using the flanks at every opportunity.
All the Bluebirds had to show for the first half where they were definitely second best was a Jason Koumas free-kick that came to nothing.
City Boss Dave Jones surely gave his players a roasting during the interval and straight from the kick-off Alan Lee raced away and crossed, but Cameron Jerome miskicked when well placed.
The second half soon mirrored the first as Leicester kept hold of the ball when they had it, while the Bluebirds regularly gave it away.
It was 20 minutes into the second half before Leicester keeper Paul Henderson was forced to make a save, Paul Parry ran through from a central position and struck a crisp shot that Henderson pushed behind for a corner.
Three minutes from time substitute Neal Ardley, on for Parry, swung over a teasing cross but Lee's downward header was brilliantly turned away by Henderson.
Lee had another close-range effort deflected wide, but it was all to late for a disappointing home side.