The 26-year-old is set to move to The Walkers Stadium for the next four weeks, with an option to extend the deal.
Hughes has struggled to work his way into The Blues midfield since their promotion to The Premiership and is now being allowed to join the First Division high-flyers.
The former Wrexham man has made over 200 appearances for Birmingham, since he moved to St Andrews in 1997.
Hughes should make his Foxes' debut in their clash with Gillingham at the weekend.
