After falling behind to Heidar Helguson's seventh goal of the campaign on the half hour, Matt Elliott quickly drew the Foxes level with a goal that had more than a suspicion of offside about it.
Leicester then went on to control the game after the break, halting the attacking raids that had been a prominent feature of the home side's play in the first half, and once Deane had put them in front, they rarely looked like letting the points slip, although Watford twice went close in a spirited late rally.
Paul Dickov could have put the visitors in front inside the opening two minutes, but he fired narrowly wide after Wayne Brown's back header had fallen short of keeper Alec Chamberlain.
After a nervous opening, Watford then went on to have the better of the exchanges, with Tommy Smith twice going close, before Helguson slid home a perfectly weighted Jermaine Pennant cross to open the scoring.
However, Leicester struck lucky within five minutes when Paolo Vernazza swung and missed the clearance in his own area, allowing Billy McKinlay to hook the ball across to Elliott who drilled an angled shot inside Chamberlain's near post.
Much to Watford's annoyance, the goal was allowed to stand, even though there were two City players in offside positions, although the Hornets did go close to regaining the lead before the break when Helguson's close-range header clipped the bar.
Chances were few and far between after the break but the one that mattered came after 65 minutes when Deane rose to head Muzzy Izzet's corner inside an unguarded far post from the edge of the six-yard area.
The Hornets continued to battle hard, and nearly drew level in the last ten minutes when Micah Hyde saw a goalbound effort strike a defender on the line and roll back into the arms of the grateful Ian Walker, while Neil Cox curled a shot just wide at the death.