In one of the most unlikely success stories in sports history the Italian guided the club to its first league title, despite starting the season as 5000-1 outsider.
But the Foxes' fairytale did not continue into this season, and with Leicester a point away from the drop zone -- they could become the first defending champions since 1938 to be relegated -- the club parted company with Ranieri Thursday.
In a statement issued through the League Managers' Association,
Ranieri said: "After the euphoria of last season and being crowned Premier League champions all I dreamt of was staying with Leicester City, the club I love, for always. Sadly this was not to be."
The 65-year-old thanked Leicester's fans for last season's "amazing adventure" and his wife, agents and the club's backroom staff.
"No one can ever take away what we together have achieved, and I hope you think about it and smile every day the way I always will," he added.
"It was a time of wonderfulness and happiness that I will never forget. It's been a pleasure and an honor to be a champion with all of you."
Ranieri was awarded The Best FIFA Men's Coach award last month
for leading the Foxes to a first league title since its 1884 formation.
Three weeks before his sacking, the club released a statement declaring its "unwavering support" for the former Chelsea manager.
But less than 24 hours after Wednesday's 2-1 first leg Champions League defeat by Sevilla -- the crucial away goal still gives the Foxes hope of reaching the quarterfinals -- Ranieri was relieved of his duties.
In a statement, Leicester's Thai owners said the club's "long-term interests" had been put above "personal sentiment, no matter how strong that might be."
The Foxes have won just five league games this season and were knocked out of the FA Cup on February 18.
They are the only side in the top four English divisions without a league goal in 2017.
"This has been the most difficult decision we have had to make in nearly seven years since (Thailand-based) King Power took ownership of Leicester City," the club's vice chairman, Aiyawatt Srivaddhanaprabha, said Thursday.
"But we are duty-bound to put the Club's long-term interests above all sense of personal sentiment, no matter how strong that might be."
Ranieri's sacking sent reverberations through the football world, drawing strong condemnation across the board from fans to rival managers.
A tribute to Ranieri posted to Instagram by Manchester United manager Jose Mourinho had more than 100,000 likes in three hours.
"CHAMPION OF ENGLAND and FIFA MANAGER OF THE YEAR sacked... keep smiling AMICO. Nobody can delete the history you wrote," the post read.
Ex-Manchester United and England defender turned TV pundit Rio Ferdinand expressed shock, while former Liverpool and Real Madrid striker Michael Owen called it a "total and utter disgrace."
"I've lost a lot of love for the beautiful game today. The players and fans of Leicester have been massively let down," Owen tweeted.
Gary Lineker, a former England national team captain and Leicester's most prominent ex-player, called the move "inexplicable, unforgivable and gut-wrenchingly sad."
Leicester City said its board will now start looking for a replacement and will make no further comment until that process is complete.