The visitors took the lead midway through the first half through their man-in-form Ollie Watkins, but a superb strike from Harvey Barnes levelled the game before the break.
However a red card shown to Kiernan Dewsbury-Hall saw the game shift heavily in favour of Unai Emery's side, and Traore's phenomenal goal shortly after coming off the bench was enough to claim the win for the visitors.
There were some further worries late on too for Leicester, as talisman James Maddison went down with an injury and had to be replaced.
Adam Sadler's big call was to give Jamie Vardy a first Premier League start since mid-January in place of Patson Daka up front.
It was Vardy's determination and high-tempo pressing that gave the home support an early lift in what was a reserved opening 20 minutes from both sides.
It would be the Foxes who created the first meaningful opportunity of the game, as centre-back Harry Souttar headed wide when given the freedom of the Aston Villa penalty area.
Souttar and Leicester would pay the price soon after as Villa took the lead just minutes later with their first shot of the game, with Watkins scoring for the sixth successive away league game.
Emi Buendia's drilled through ball was controlled excellently by Watkins who rolled the ball past the on-rushing Daniel Iversen, as the ball trickled slowly but surely into the Leicester goal.
However, Leicester showed their attacking prowess to equalise 10 minutes later, as Barnes beat Ashley Young for pace on the left-hand side following a long, searching ball from Wout Faes, before unleashing a powerful strike past Emi Martinez from a narrow angle.
The goal shifted momentum back in Leicester's favour, as the hosts enjoyed more of the play as the first half came to a close.
Barnes went close again with the help of a huge deflection off Tyrone Mings, but Martinez smartly adjusted his body to sweep the ball away from goal with his legs.
The first 20 minutes of the second half saw Leicester have territorial dominance, but frustratingly they failed to threaten the Villa goal at all.
The game's big turning point came during a five-minute spell midway through the second half, as two silly fouls on Young from Dewsbury-Hall saw the Leicester midfielder dismissed with 20 minutes remaining.
As expected, Villa grew into the game immediately as Jacob Ramsey and Young both fired narrowly over the bar with half chances.
Leicester still showed some potency in attack on the break, with Daka's first touch almost resulting in a goal, but the Zambian's instinctive strike curled high and wide.
Then the all-important moment came just moments after a bold triple substitution from Emery, with Traore being given just a third appearance since arriving back after a brief loan away at Istanbul Basaksehir in Turkey earlier this season.
Wilfred Ndidi's giveaway on the edge of his own box saw Traore latch on to the ball, striking ferociously with a first-time effort that gave Iversen no chance.
Despite falling behind with two minutes to play and playing with a man light, Leicester thought they may still have gotten out with a point, when referee Graham Scott pointed the spot after a collision between Daka and Watkins in the area.
However, on VAR review, it was clear that Daka was the one who barged into Watkins, and the penalty was duly overturned, with Villa going on to see the game out, winning 2-1.
The result means the visitors now find themselves in the lofty heights of seventh despite a very poor start to the season under Steven Gerrard, as Liverpool failed to win at Chelsea this evening.
Leicester remain in big trouble down in 19th, two points from the foot of the table, and another two points from safety in the congested bottom half.
The Foxes welcome Bournemouth to the King Power in a pivotal encounter on Saturday against two sides currently in the bottom three.
Aston Villa's hunt for Europe continues when they host another of Leicester's relegation rivals, Nottingham Forest, at Villa Park this weekend.