On 1 April 2007, after being included in the squad due to an injury to the club's new loan signing Andrew Cole, he scored twice as a substitute as they beat local rivals Coventry City 3–0. Manager Steve Bruce stated, "I made a big mistake by leaving him out of the 16 and I had to admit that to him and apologise to him for that. He keeps knocking on the door and I'm obviously going to have to put him right in my thoughts again."
On 20 July 2007, Campbell signed a four-year contract with Championship club Leicester City for an initial fee of £1.6 million, which could have risen to £2.1 million, reportedly beating off competition from Watford for his signature. In his column on BBC Sport, Ian Holloway, then-manager of Plymouth Argyle, described the fee as "absolute madness". Three months later, he went on to manage Campbell at Leicester, and again at Blackpool.
Leicester were relegated at the end of the season after Campbell had made a total of 32 league appearances, scoring four league goals. He also netted in a 4–3 away defeat to Chelsea in a League Cup match on 31 October 2007. He was sidelined through injury in November 2007, suffering from osteitis pubis for three months.