Harry Kane grabbed a goal back in the second half but, despite plenty of pressure, Pearson's men were unable to find an equaliser.
"I think it's been another frustrating night for us," Pearson told reporters. "Unfortunately, I think conceding two goals in quick succession before half time had a pretty visible effect on the players mentally.
"It knocked us for six really. Up until that point we'd been very much in the ascendancy, but that's been the story of the last two or three months for us.
"The bottom line is we're looking at the game and we've unfortunately not done enough to win. It's not a case of looking for excuses or trying to hide behind what the Championship is like."
Defeat means that the Foxes have won just one of their last 12 fixtures, which has seen their bid for automatic promotion collapse.
A spot in the playoffs also seems unlikely now, but Pearson, whose future has been in some doubt of late, believes that the team have made progress in recent weeks.
"The fans have stuck behind the players, been very positive, but unfortunately we weren't able to deliver again," he added.
"It's a shame because we've made some real progress, but unfortunately the results haven't done enough to get us where we want to be."
Leicester travel to the City Ground for their final game of the season against Nottingham Forest.