The Spanish forward has agreed a four-year deal with the Foxes after joining for an undisclosed fee.
"I think he's a player who will excite our supporters and his style is one that I believe complements the options and quality that we already have here at the football club."
Perez, 25, spent five years at Newcastle after signing from Tenerife in 2014.
He has struck 33 goals in 143 Premier League appearances and last season enjoyed his most productive campaign, scoring 12 goals to help the Magpies finish 13th.
Perez is Leicester's second signing of the summer following the arrival of defender James Justin from Luton Town.
The Spaniard will be hopeful of making his Leicester debut at home to Wolverhampton Wanderers on Sunday 11 August.