
The 35-year-old goalkeeper had been offered a new contract to remain at Deepdale but left the Championship outfit in the summer.
Cornell, who made 15 appearances for Town in the 2020/21 season, has spent the last four years at the Lilywhites, having joined from Peterborough United in the summer of 2022.
MORE: Ex-Town loanee signs for League Two side - who are managed by Ex-Blue!
Dai Cornell, pictured for Preston last season. (Image: PA)
He has now linked up with Russell Martin's side, who have three ex-Blue in their ranks in Wes Burns, Conor Chaplin and fellow goalkeeper Alex McCarthy.
The Welshman drops down to the third tier with the Foxes to boost their goalkeeper options after Jakub Stolarczyk suffered a season-ending knee injury earlier this month.
On moving to the King Power Stadium, Cornell said: “I'm delighted to sign and excited to be here. It’s a fantastic football club with a fantastic manager.
"I’m looking forward to getting started and helping in any way I can. Hopefully, together, as players, staff and fans, we can achieve what we want to achieve this season.”