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"I see Craig as a utility player who can play in a variety of roles, up front, in midfield or out wide," manager Micky Adams told lcfc.co.uk.
"He has got a good scoring record as well and has scored goals at every level including the Premiership.
"He will give us plenty of options and will be a very useful addition to the squad because of his versatility."
Hignett scored 57 goals in 160 Crewe Alex appearances, and hopes to join the Leicester pre-season squad to Finland next week.
