The Seasiders went down to a single goal at the King Power Stadium, scored by Ben Marshall from the penalty spot.
"The boy's blatantly dived. If someone's pushed, they don't go up in the air. The ref's made an error and he shouldn't be allowed to," said Holloway.
"If the fellow in the red shirt did his job as well as we did ours, we'd have got a point.
"Someone of his quality and experience shouldn't be influenced by the crowd."
Blackpool remain top of the Championship after four games despite suffering their first league defeat of the season against the Foxes.