Mourinho's side are 14 points behind fourth placed Manchester United with 22 matches remaining and even the Blues boss has given up on the crisis-torn champions' hopes of making up that gap.
Goals from Jamie Vardy and Riyad Mahrez condemned Chelsea to their ninth defeat in 16 league games and they are now just one point above the bottom three.
“The top four is gone, clearly,” Mourinho told Sky Sports.
“I don't accept we are in a relegation battle.
“You look at the table and we are there but you think you are in a relegation battle if you think you are there for three or four months. I don't think that.”
Chelsea's latest flop in a dismal season left Mourinho admitting he was growing increasingly frustrated by an astonishing slump that could lead to his sacking.
“When some of your players don't hit the levels they are capable of it is hard to see,” he said.
“This season we are doing so bad for some reason, although not all of them.
“We were the best team for 20 or 25 minutes, maybe for a maximum of 30 minutes. Then Leicester were the best team for an hour.”
Already beset by reports that he is close to being axed by Chelsea owner Roman Abramovich, Mourinho hoped he had bought himself some breathing space after leading his side into the Champions League knockout stages last week.
But the loss to Claudio Ranieri's surprise leaders will turn the heat back up on Mourinho and he responded by vowing to work even harder on the training ground.
“To turn things around, I know only one way: working at the top level,” he added.
“Day by day in training I have no complaints with them. But is it frustrating to see what they are doing in training and what they do in matches, then clearly yes.” – AFP
Original source: No chance for top four - Jose