Nigel Pearson made several changes to the team that lost away at Peterborough last Saturday - with Richie Wellens, Paul Gallagher and Marko Futacs given a rare chance to impress.
Unfortunately, it was an opportunity that passed them by as the team failed to continue their impressive home run - succumbing to a 2-1 defeat at the hands of their Championship rivals.
The Foxes fell behind with just three minutes on the clock when the visitors took advantage of a free-kick awarded on the edge of the box following a clumsy foul from Wes Morgan. Midfielder Adam Clayton fired in the resulting free kick, sending the ball flying into Schmeichel's left hand corner.
Huddersfield's lead was short-lived however. Just minutes later, Paul Gallagher's ambitious shot from distance was deflected high and wide for a corner which the Terriers failed to deal with. Young Manchester United loanee Michael Keane took advantage, smashing home from eight yards to score his first goal for City.
From then on, the home side took control of the match and the outcome looked inevitable. However, Nigel Pearson's men were clearly missing the clinical finishing of man-of-the-moment Chris Wood. And David Nugent's stand-in partner in attack Marko Futacs simply wasn't up to the task.
In fact, the home side's best chance to take the lead on the night was spurned by Futacs, when he miss-fired Nugent's centre from six yards out when the goal was gaping.
Despite a string of chances and long spells of pressure, Huddersfield hung on and it was they who took advantage when the match remained level late on.
Sean Scannell had looked dangerous all night, but when he picked up the ball wide left, any chance on goal looked unlikely, with both Konchesky and Keane closing in. However he evaded both challenges whilst cutting inside before squeezing the ball under Schmeichel to grab the win for the visitors.
Leicester's night went from bad to worse as a Hull City win at home to Derby meant they leap-frogged the Foxes into second place in the Championship.
Nigel Pearson will now need to rally his men ahead of a vital encounter with Chris Powell's Charlton Athletic when their Championship promotion-chasing campaign resumes next Tuesday night at the King Power Stadium.