Unanswered second-half goals from Noel Hunt and substitute Hal Robson-Kanu saw the visiting Royals claim all three points against Sven Goran Eriksson's much fancied Leicester side.
"You could smell the expectation around the place today," boss McDermott told the club's official website.
"They've signed a lot of players and spent a shed load of money but our squad is terrific. We've got a good bunch - if you give them a job to do they'll do it.
"Today, our quality on the ball was first class, the organisation was good and I thought we were deserving winners."
Reading now face a trip to Portsmouth on Tuesday evening.