Leeds have now lost three of their six league games at Elland Road this season and looked a shadow of the side that had bounced back from a stunning 6-4 defeat to Preston in their last home game to win 2-1 at Middlesbrough on Saturday.
Grayson said: "It's frustrating. We wanted to try and build on the weekend's result, but it probably typifies our season so far.
"We're very inconsistent. We played very well at the weekend, did a lot of good things, had energy, had quality, desire, but we didn't do any of those things very well.
"We were dictated to by Leicester from the start. They played very well and you've got to give them credit, but we didn't do the good things we're capable of."
Source: PA