Manager Brendan Rodgers said there was an issue with the striker's documentation, which meant he was not allowed into the country.
The news was an unexpected blow for the Foxes, with Iheanacho having two goals and two assists in nine appearances in all competitions this season, a tally bettered only by Jamie Vardy (five goals and one assist).
"We've had an issue with Kelechi," Rodgers said on Wednesday. "His documentation coming into the country wasn't sufficient, so unfortunately he isn't available to play, which is a shame because he would have played in the game.
"He will be unavailable for the game. The paperwork didn't allow him into the country. It's unfortunate, but we'll have to look into that when we get back."
Leicester will also be without the suspended Wilfred Ndidi against Legia, while centre-back Jonny Evans remains sidelined with a foot injury.
The Premier League side drew 2-2 with Napoli in its opening group game, while Legia won 1-0 at Spartak Moscow.
This will be the third English side Legia has faced in European competition. It was knocked out of the Cup Winners' Cup in 1990-1991 by Manchester United before taking four points from Blackburn Rovers in the Champions League group stages in 1995-1996.