The 30.-year-old goalie was a key player in Leicester's stunning run to the Premier League title last season and the achievement swayed the judges in his favour this time around.
Schmeichel had been nominated for the award both in 2014 and 2015 but Tottenham's Christian Eriksen won on both occasions.
He has now followed the example of his father, who had won the award during his time at Manchester United.