"I am really pleased to have signed and can't wait to get started," said Hobbs.
"Liverpool have some world-class centre backs so I spoke to the boss and he said I was free to go out on loan and gain some experience.
"Leicester showed their interest and I had no hesitation in coming here. This is a massive club with a good manager and top class Premier League facilities.
"I want to help this club get back to the Championship at the first time of asking."