Iheanacho has endured a rocky time at the Foxes since his move from Manchester City in 2017, and last season he managed just nine starts, scoring one goal.
Ultimately, his loss of form cost him a place in Nigeria’s squad to the 2019 Africa Cup of Nations, starting in Egypt on Friday.
According to Ambrose, the young Nigeria international - who was named Caf Most Promising Talent of the Year twice - needs to remain at the King Power Stadium where manager Rodgers could revive his declining career.
“I know Brendan Rodgers very well and he is a manager that can develop Iheanacho into one of the best strikers in the world,” Ambrose told Goal.
“However, the most important thing if for him to keep working hard. Once he can show Rodgers commitment, zeal, determination and passion to excel, he will not be looked down upon at Leicester City.
“I have worked under Rodgers and he is such a manager who understands football so well. So I will advise him to stay at Leicester because over there, he has a man who can develop him into a fearless striker he used to be.”
Iheanacho was part of Nigeria’s squad for the 2018 Fifa World Cup in Russia, but will have to wait at least until Cameroon 2021 before making his Afcon bow.
And Ambrose, who was played a key role in the Super Eagles’ 2013 Afcon triumph in South Africa, has offered a piece of advice to the youngster in his quest to bounce back into the limelight.
“Not making the team to Egypt is not the end of the world, he is still a young lad and still has a lot of years ahead of him,” he continued.
“I know how disappointed he would feel but the most important thing is how he manages himself and bounce back to reckoning.
“He should shake the pains off and cheer the Super Eagles to victory in Egypt because he is still part of the team, only that the coach has picked who are good enough to win the Africa Cup of Nations.
“With hard work and focus he will be back in the team again because I believe he has a big potential. So rather than moan over his Nations Cup miss, this is the time to show the national team coaches on what he can do.”