Brendan Rodgers feels Leicester need to “reset mentally” to stay in charge of their Champions League destiny.
The Foxes remain third in the Premier League but are fading fast, their recent slump continuing with a 2-1 loss at Everton on Wednesday.
Rodgers’ side have claimed just two points from their three games since competition resumed.
The 19-year-old defender has agreed a three-year deal with the Blues after his contract with the Ligue 1 side – where he played for the B team – expired last month.
Director of football Marcel Brands said: “Niels is a young, talented player with good technical and physical skills.
“Hopefully he can learn a lot from Lucas Digne and Leighton Baines, as well as Carlo Ancelotti and David Unsworth, and follow the same pathway into the first team the likes of Dominic Calvert-Lewin and Mason Holgate have taken in recent years.”