Leicester began well and looked like a different team to the one which has been seen in the past few weeks.
Shinji Okazaki first went close when he forced Simon Mignolet into a fine save with his flying header.
Robert Huth then had a free header from a corner but slammed it over the top.
Vardy was looking dangerous and he put the Foxes ahead with 30 minutes gone after he collected Marc Albrighton’s pass and slotted into the net.
And it got better for Leicester before half-time as Danny Drinkwater fired home a volley from 25-yards.
After the break Vardy added his second and Leicester’s third when he got between Lucas and Emre Can and headed home Christian Fuchs’ cross.
Liverpool tried to get back into the game and went close when Adam Lallana forced Kasper Schmeichel into a fine save.
And the Reds found a goal when Philippe Coutinho side-footed home from 15-yards out.
But it proved to be a consolation as Leicester secured a crucial three points.
