The St Kitts & Nevis Under-20 international, now 21, was at Solihull Moors before joining the Foxes in 2017.
Since then he has made six EFL Trophy appearances for Leicester's Under-21s, netting once, and scored seven times in the Under-23 Premier League 2.
New Saddlers head coach Taylor said: "It's been a protracted transfer.
"Tyrese is someone we identified early and we're really happy that we've managed to get the deal over the line. It's taken time.
"He's had a fantastic education football-wise with Leicester. He'll be a player that will excite the fans and take risks in the final third."
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