City defender Nathan Ake fouled Iheanacho in the penalty area, less than a minute before full time, which earned Leicester City a penalty.
The game always serves as a curtain-raiser to the start of a new Premier League season. It is always between the winner of the Premier League and the winner of the FA Cup of the previous season.
Manchester City's record signing, Jack Grealish, made his debut for the citizens, but could not create an opportunity in the 65 minutes he had in the game.
There was a chance for City's midfielder, IIkay Gundogan, who saw his free-kick tipped over by Kasper Schmeichel.
The past 12 months have been amazing for Leicester City fans, seeing their club win the FA Cup last season against Chelsea and winning the community shield a few months later.
Leicester City has been competitive in the last five years, winning the Premier League title in 2016 against all odds.
The Foxes have been a force to reckon with in challenging for Champions League spots in the Premier League finishing fifth in the last two seasons.