The Hornets got off to quite literally, the perfect start as Etienne Capoue put them ahead after just 33 seconds - Watford's fastest Premier League goal.
Roberto Pereyra crossed from the right which was was flicked on by Troy Deeney and was then volleyed home by Etienne Capoue.
Pereyra then scored himself with a curling effort to put Watford 2-0 up after just 12 minutes, but Leicester soon replied with a goal of their own.
Miguel Britos brought down Jamie Vardy in the area and Riyad Mahrez scored the subsequent penalty to claw one back, but Leicester couldn't find an equaliser.
Leicester stay in 14th, but are just two points ahead of 18th placed Hull while Watford now sit in eighth, just one point behind Everton and Manchester United.