The 21-year-old striker, who was on target for City’s Development Squad at King Power Stadium on Monday night, played eight games for Aidy Boothroyd’s Cobblers in a loan spell earlier this season.
Blyth scored three times during that period, including one on his debut in a 3-1 home victory over newly promoted Newport County, before a thigh injury cut short his spell.
The powerful striker’s aerial ability and clinical finishing will be a boost to Boothroyd’s men, who with just one win in their previous 14 in all competitions, will be looking to return to winning ways when they tackle Bishop’s Stortford in the FA Cup First Round on Sunday.
Blyth will be fit and available for the Cobblers' FA Cup match, which will be followed by a tough top against bottom clash at home to league leaders Fleetwood Town on 16 November.
The 6ft 2ins forward joined Leicester City in the summer of 2012 from non-league side Leamington FC.