Thomas, who came through the Coventry youth ranks and made his debut at the age of just 16, scored nine goals in 36 appearances for the Sky Blues last season.
“I’m buzzing, I’m delighted to get it over the line finally and I’m looking forward to the season coming and seeing what I can do,” the 20-year-old told LCFC TV .
“I’ve seen a few of the boys in the changing room. It’s all good at the minute. The facilities are unbelievable and I just can’t wait to get started.
“It’s my hometown, I only live 10-15 minutes away in Wigston. It’s always good to play for your hometown team so hopefully I can push on from here.”
The 2015-16 Premier League champions are believed to have struck a £500,000 compensation deal with the League Two outfit.
Thomas, who can play in midfield or as a striker, is Leicester’s fifth signing of the summer following the acquisitions of Harry Maguire, Vicente Iborra, Eldin Jakupovic and Kelechi Iheanacho.