The club bought the 28-year-old just before the transfer window closed on Aug. 31, but FIFA, which handles international transfers, received the paperwork moments after the deadline for registration ended.
"It was our intention to submit an application to the Court of Arbitration for Sport for expedited proceedings so that the matter could be resolved as quickly as possible," Leicester said in a statement on Tuesday.
"However, it has been made clear to us that FIFA will not support an expedited process, forcing the club to reluctantly accept the single-judge ruling of FIFA's Players' Status Committee."
The club said it would continue to support Silva in any personal appeal. Leicester will now only be able to sign the him when the transfer window reopens in January.
(Reporting by Shrivathsa Sridhar in Bengaluru, editing by Ed Osmond)
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