But the Merseysiders' disappointment was eased a little by Newcastle's defeat at Bolton that allowed them to strengthen their hold on fourth place in the Premiership.
Eager to shrug off their UEFA Cup exit in Marseille, Liverpool started brightly and had the first clear chance after three minutes when Milan Baros latched on to a long clearance, but Matt Heath recovered his footing to deny the striker a clear shot on goal.
After Marcus Bent had fired high and wide, Steven Gerrard curled a superb ball into the path of Baros whose tame effort failed to trouble Ian Walker.
Baros then turned provider on 20 minutes when he cut in from the byline and picked out Bruno Cheyrou who got his body shape all wrong to prod the ball wide.
The Reds' more studied approach was increasingly pinning back Leicester who had a rare sight of goal on 25 minutes, but Heath scooped the ball over the bar after good work by Muzzy Izzet.
Liverpool fans thought Gerrard had scored on 35 minutes but his powerful drive had hit the sidenetting.
Then the midfielder was close again forcing Walker to divert his long-range shot for a corner and then Dietmar Hamann almost caught out Walker with a shot which took a wicked bounce in front of the keeper.
Liverpool started the second half at a gallop and almost broke through when Cherou's 25-yard drive struck the angle of the post and bar.
Leicester hit back through Izzet whose 15-yard shot was parried by Jerzy Dudek and the loose ball was scrambled away for a corner which was eventually cleared.
Dudek came to the Merseysiders' rescue on 55 minutes when he did well to beat away Ben Thatcher's fiercely struck free-kick from just outside the penalty area.
Twenty minutes from the end, Baros could only shoot tamely at Walker from close range after good work by Harry Kewell.
And with two minutes remaining Dudek was again Liverpool's saviour when he showed lightening reactions to keep out another thunderbolt free-kick from Thatcher.
Deep into time added on, Izzet had an outstanding chance to snatch it for Leicester when he connected with a Steffen Freund cross, but Liverpool were grateful to see the ball slip agonisingly wide of an upright.