Following last weekend's defeat by Manchester City in the Continental Cup, defender Lucy Johnson returned to City's starting line-up, replacing Simran Jhamat.
The Foxes made an assured start to proceedings in Quorn and could have been ahead after half an hour when Hayley James crossed for Lachante Paul, who was unable to reach it.
Leicester's best chance, meanwhile, came just minutes before the interval as James found space at a corner but her inventive chip was tipped over the bar by Palace goalkeeper, Lucy Gillet.
Just before the hour-mark, City were ahead as substitute Paige Bailey-Gayle met a cross at the near post and looped a header over Gillet just two minutes after coming off the bench.
However, with 15 minutes to go, the visitors equalised through Annabel Johnson, a former Leicester City Women player, who sent a powerful into the back of the net.
The comeback was completed for Palace in the 80th minute, meanwhile, as Leeta Rutherford’s fearsome effort found the top corner.
Leicester remain 10th in the FA Women's Championship ahead of a trip to face Lewes at The Dripping Pan on Sunday 13 October (2pm BST kick-off).
City: Field, N. Johnson, Everett (Thomas 80'), Morgan (c), Cataldo (Bailey-Gayle 58'), Smith, Blanchard (Jhamat 65'), Paul, James, Brown, L. Johnson
Subs not used: Taylor, Popple
Goals: Bailey-Gayle 60'
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