The 57-year-old Puel is the fifth English topflight manager to be sacked this season
Leicester announced the sacking of manager Claude Puel on Sunday following the struggling Premier League side's sixth defeat in seven games.
Saturday's 4-1 loss to Crystal Palace dropped the 2015/2016 champions to 12th, only eight points above the relegation places.
A statement released by the club said: "Leicester City Football Club has today (Sunday) parted company with Claude Puel, who leaves his position as first team manager with immediate effect."
First team coaches Mike Stowell and Adam Sadler will assume caretaking responsibilities.
"The club would like to thank Claude for his efforts in leading the team during his 16 months in the role and wish him well in his future career," the club added.
Puel's assistant manager Jacky Bonnevay has also been let go.
The 57-year-old Puel is the fifth English topflight manager to be sacked this season, following Slavisa Jokanovic from Fulham, Mark Hughes (Southampton), Jose Mourinho (Manchester United) and David Wagner (Huddersfield).
The Foxes' miserable run includes a defeat to League Two side Newport in the FA Cup.
Their dip in form followed a promising period over Christmas when they beat both Chelsea and Manchester City, their last home success on Boxing Day.
Their last win was on New Year's Day, with Jamie Vardy scoring the goal in a 1-0 victory at Everton.
The Midlands side have endured a traumatic season with the death of owner Vichai Srivaddhanaprabha and four others in a helicopter crash outside the club's King Power stadium in October.
Puel took over from Craig Shakespeare at Leicester in October 2017 after a year-long spell in charge of Southampton.
The Frenchman steadied the ship and eventually led the side to a ninth-place finish in the Premier League.
He was backed by the club's board last summer, spending money on the likes of James Maddison, Ricardo Pereira, Rachid Ghezzal and Caglar Soyuncu as he aimed to change Leicester's style of play.
However, the Frenchman's approach came under fire from fans, especially his use of Jamie Vardy - with the former England striker also publicly questioning his manager's tactics and training regime.
Celtic manager and former Liverpool boss Brendan Rodgers is reported to be among the front-runners to replace Puel in the summer, with the club set to install an interim manager for the remaining 11 matches of the season.