Callum Hudson-Odoi’s penalty put the Blues ahead midway through the first half but, just after the hour-mark, Shinji Okazaki pounced to head the visitors level in Hampshire.
Following a 2-2 draw and penalty shootout success at Fleetwood Town in the Checkatrade Trophy, City’s line-up in Aldershot included four changes.
After a lively start, it was Leicester who threatened to open the scoring early on as Fousseni Diabaté galloped down the right wing and found Ryan Loft, but the forward’s effort was wide.
Chelsea’s Hudson-Odoi, meanwhile, also went close for the hosts, curling an ambitious effort just wide of Viktor Johansson’s net on 10 minutes.
However, when Elder was adjudged to have fouled Tariq Lamptey on the half-hour, the 17-year-old stepped up to convert the spot-kick, firing it into Johansson’s bottom right corner.
City continued to press, though, and Diabaté was unfortunate to have a half-volley blocked before the Malian also whipped a shot just wide of the Blue net before the break.
Diabaté was a threat in the second half, too, narrowly missing the target from outside the box in the 55th minute before Callum Wright was introduced from the bench, replacing Loft.
Shortly after, Elder played a wonderful delivery in from the left and it met Okazaki’s head, but the Japan international’s effort looped over Marcin Bulka’s crossbar.
However, the Foxes striker would make amends immediately as, in the 64th minute, he got on the end of Hamza Choudhury’s cross to nod it into the net and draw the visitors level.
In the latter moments, Kiernan Dewsbury-Hall corners caused problems for the hosts, but City were forced to settle for a solitary point in Aldershot.
Goals: Chelsea U23s 1 Leicester City U23s 1
All the key moments from the Leicester City Development Squad's 1-1 draw at Chelsea on Sunday.
After holding the ball up and providing essential experience for the young players around him, Shinji Okazaki rose highest to score an impressive header on 66 minutes.
It was a key point in the fixture for the Foxes who would have been forgiven for being frustrated by their misfortunate in front of goal, but Okazaki’s goal secured a hard-earned point.
Knight was a commanding presence in defence.
Once again, Josh Knight was in fine form for the Club’s Development Squad, making a succession of magnificent tackles to keep Chelsea at bay.
Whenever City were in danger of conceding, the 21-year-old centre back took control of the situation in a mature manner to make sure the ball was cleared away to safety.
Where does it leave us?
Beaglehole: We Were Brave
Steve Beaglehole speaks to LCFC TV following the Development Squad’s 1-1 draw at Chelsea on Sunday.
The Foxes regain top spot in Division 1, overtaking Brighton and Hove Albion, with 10 points to their name after five games.
Elder started the game at left back for the Foxes.
City's youngsters next welcome Brighton to King Power Stadium in Premier League 2 on Monday 24 September (7pm BST kick-off) - and, as usual, it's live on LCFC TV.
City: Johansson, Johnson, Söyüncü, Knight, Elder, Choudhury (c), Dewsbury-Hall, King (Kaba Sherif 86), Diabaté (Pascanu 78), Okazaki, Loft (Wright 56)
Subs not used: Davies, Uche Rubio
Goal: Okazaki 66
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