The 20-year-old Poland international failed to make a single Premier League appearance for the Foxes after his £7.5m switch from Ekstraklasa side Cracovia.
However, after consideration from the English side, the club’s technical team decided his development will be best served with a temporary switch to Breisgau-Brasilianer, who finished seventh in the German top-flight last season.
“The Bundesliga is a big challenge and Freiburg enjoys an excellent reputation,” he said upon his unveiling. “I’ve had very good discussions with the club and I’m convinced Freiburg is the right place to continue my development.”
Kapustka has scored three times for the senior Poland national team in 14 caps since making his debut as an 18-year-old in 2015.