The Seagulls host the Foxes on Saturday knowing whichever team comes out victorious will end the day in the play-off spots.
"I'm surprised to be above them," said Oatway. "I'm surprised to be above quite a few other teams as well though, but that's just my personal opinion.
"There are teams who should be a lot higher but that comes down to the pat on the back that the players deserve for what they are doing.
"I look at the table and think that clubs should be looking at themselves and wondering why they are not a bit higher than what they are.
"Leicester can score goal after goal in a game - that's how highly I rate them. They have gone through a bit of a rut but they are a very good footballing side and they were my tip to go up automatically, above Cardiff.
"There are enough games for them to change this period around. Look at their players - if they go and win their last five or six games it wouldn't surprise anyone."