The former Inter and Juventus boss will receive the Grande Ufficiale dell'Ordine al Merito della Repubblica Italiana for "merits acquired by the nation" in the field of sports.
Ranieri's honour is the third level of the Italian knighthood. Players who helped Italy to win the 1982 and 2006 World Cups are Cavalieri Ufficiali dell'Ordine al Merito della Repubblica Italiana - the rank below.
Ranieri joins a diverse collection of famous names to have been awarded the Grande Ufficiale, including former president of the United States John F Kennedy, ex-New York City mayor Rudy Giuliani, film director Federico Fellini and opera singers Luciano Pavarotti and Andrea Bocelli.
Bocelli performed versions of 'Nessun Dorma' and 'Con te Partiro' on the King Power Stadium pitch as part of Leicester's title celebrations before their final home match of the season against Everton.
Last week, Leicester East MP Keith Vaz wrote to the Cabinet Office to nominate Ranieri for an honorary UK knighthood in recognition of his achievements.
