The 26 year old spent time on loan with the Posh last season, but that was cut short after he sustained a knee injury forcing him to return to his parent club.
"I am fully fit now, I have played a few times for Leicester and if the manager wants me to play, I am ready. I have been fit for six or seven weeks now so I was looking to go out on loan and this is a perfect move for me," The defender said.
Kennedy played fourteen times for the Posh before his injury cut his stay short.
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