Leicester City manager Micky Adams told the club's website: "Riccardo was one of the driving forces on the pitch for Nottingham Forest last season."
He added: "He is a versatile player who can operate in a variety of positions in midfield or defence."
Scimeca made 166 appearances for The Reds after signing for £2.75m in 1999 under David Platt.
He was offered a new deal at The City Ground but they were reduced terms and the temptation of the Premiership was just too much for the former Forest captain.
Riccy becomes The Foxes' third signing this season following the arrivals of Steve Howey from Manchester City and Paul Brooker from Brighton.