But despite their numerical disadvantage the visitors hung on and levelled five minutes from time to frustrate the home fans.
Confident Watford swept into a 10th minute lead after Paddy McCarthy had fouled Paul Devlin to concede a free-kick just outside the penalty area.
Rab Douglas was still organising his defensive wall when King stepped up to fire a low shot into the back of the net with the Leicester keeper rooted firmly to his line.
It was the ninth goal of the season for King who is on loan at Vicarage Road from Leicester's East Midlands rivals Nottingham Forest.
City were struggling to make headway against their lively opponents and had to wait until the 25th minute before creating a significant attempt on goal when Elvis Hammond's cross to the far post picked out Mark De Vries, who failed to connect cleanly allowing the keeper to collect comfortably.
Momo Sylla then arrowed a cross into the heart of Watford's penalty area with Clarke Carlisle getting in front of De Vries for a timely interception.
Foxes continued to press with Alan Maybury's rising shot from 20 yards only just over.
City's persistence was rewarded on 38 minutes when Ryan Smith's low cross from the left reached Gudjonsson at the far post who had time to compose himself before side-footing home from six yards.
It was the Foxes first goal in almost four hours of football.
And a minute before the break the home side found themselves in front when Matthew Spring was ruled to have used his hands to block Sylla's inswinging corner.
Gudjonsson stepped up to steer the penalty into the bottom right-hand corner of the net with the keeper going the other way.
Carlisle had been shown yellow in first-half stoppage time for taking a dive and a minute after the restart Watford were reduced to ten men when the same player fouled Gudjonsson and was sent off for a second bookable offence.
Gudjonsson then came within a whisker of his hat-trick when his diving header from Maybury's cross flew inches wide of the near post.
But despite an extra man, Leicester struggled to stamp their authority on Watford who continued to probe the City rearguard.
It was clear the home side needed a third goal to steady their nerves and it almost arrived ten minutes from the end when Smith played Dion Dublin clean through, but the substitute striker could only guide a 12-yard shot the wrong side of an upright.
It was a costly miss because five minutes from the end Watford were level when Gavin Mahon's far-post cross was headed back across goal by Ashley Young for the unmarked Malky Mackay to sweep the ball home from close range.