The Italian won the award thanks to an incredible Premier League title win against all odds.
The Foxes won the English top-flight by a margin of 10 points, losing just three games in the whole Premier League season.
Ranieri has also led the East Midlands club to the last-16 of the Champions League, topping their group in the group stages of the competition.
The former Chelsea boss beat Real Madrid manager Zinedine Zidane and Portugal manager Fernando Santos to the award.
Zidane's Madrid won the Champions League, the UEFA Super Cup and the Club World Cup in a remarkable first year in management.
Meanwhile, Fernando Santos led Portugal to Euro 2016 glory, but the pair's achievements were second to Ranieri's shock Premier League title.