Kirsty Howat, Justine Vanhaevermaet and Annabel Blanchard got on the scoresheet at Meadow Lane as Palace came out on top in the final round of group stage games, leading to their progression in the Women's League Cup, while we exited.
Rick Passmoor made three changes to the side that were beaten by Brighton & Hove Albion last weekend, with Janina Leitzig, Hannah Cain and the injured Jutta Rantala making way for Olivia Clark, Hlín Eiríksdóttir and Rosella Ayane.
Quick start from the visitors
City fell to defeat at Meadow Lane.
Currently playing their football in WSL2, and 10th in the standings, Palace got off to a flying start, dominating the ball and chances in the opening 10 minutes, resulting in them taking an early lead.
After an initial save from Clark, Howat was on hand to turn in the rebound and put the Eagles in front. Leicester reacted well and started to get a foothold in the game, striking the crossbar through Eiríksdóttir, but against the run of play it was Palace who scored a second when Vanhaevermaet turned a free-kick goalwards with a header.
The away side kept the pressure up after the restart, and soon got a third, after the ball was expertly pulled back into the box for Blanchard, who was clinical against her former employees.
Tempers flare at Meadow Lane
The visitors were reduced to 10 in the second half.
With a three goal-deficit, Palace were reduced to 10 players. Emotions came out between both sides as McLoughlin was fouled by the touchline.
In the heat of the moment, Ruesha Littlejohn grabbed Hannah Cain around her neck and brought her to the ground, giving the referee no choice but to show her a red card.
Despite the player advantage, Leicester couldn't click to get any form of comeback started, and we fell to our first defeat of the competition, moving us down to second in Group D, meaning we exit the League Cup in the group stages.
International break
Our focus turns to the WSL after the break.
The Foxes are now set for a second international break of the season, with plenty of our stars jetting around the globe to represent, and you can keep up with their progress via our official social media channels.
Following the week off, we return to Barclays Women's Super League action with two home games at King Power Stadium prior to the Christmas break.
First of all taking on league leaders Manchester City on Sunday 7 December (12pm kick-off), before London City Lionesses make the trip to Filbert Way on Sunday 14 December (11:55am kick-off) - tickets for both games. All times GMT.