Liverpool were already 1-0 up when Caglar Soyoncu was penalised for handling Trent Alexander-Arnold’s corner twenty minutes to full time.
The decision came as a huge blow to a Leicester City side that had begun to build some steam after being under the couch for most of the game.
Substitute James Milner stepped up and neatly dispatched the penalty before Roberto Firmino and Alexander-Arnold put clear daylight between the teams with two further goals.
The result left Leicester City trailing Liverpool by 13 points and the Foxes could drop to third place should champions Manchester City overcome Wolverhampton Wanderers at Molineux later on Friday.
Speaking after the game, Schmeichel felt the penalty awarded against them was harsh and rebuked the referee for his decision.
“I think it was a bit tough,” Schmeichel, who won the title in 2016 with Leicester told Amazon Prime.
“We were in the game until the referee had to make himself a hero. Then we lost our composure. They are the best side in the world along with Manchester City.
"What's his name… Dermot [Gallagher, former referee], he'll be on Sky saying it's a great decision, the referee was brave or something like that but I don't know what he's supposed to do.
"His arm's down by his side. It's flicked off someone at the front post, he's got less than a millisecond to react. I don’t know how…
"Once he gives it – he's desperate to give it, it looks like – once he gives it VAR's never going to turn it over."
