The Foxes have signed the 18-year-old Spanish striker on a four-year deal and he will officially join the reigning Premier League champions on July 1.
Uche joins for an undisclosed fee after Leicester beat off competition from a host of teams for his signature.
The highly-rated youngster, who follows fellow Spaniard Luis Hernandez to the King Power Stadium, will link up with Leicester's Development Squad.
"I like the Premier League. Leicester fits the profile, they are hard-working," Uche is quoted as saying to Spanish newspaper AS.
"I think I will adapt well. My style of play is more like English than Spanish football. I have a more physical game.
"Until recently, I did not know much. My agent told me there was someone from England but I did not know the team.
"When I found out, we went over and decided to sign for them."
CONFIRMED: #lcfc will sign Raul Uche from Rayo Vallecano on a four-year deal from 1 July: https://t.co/I3hkU5TRwkpic.twitter.com/QDEblLzgP4
— Leicester City (@LCFC) June 29, 2016