Leicester have signed Argentina international midfielder Esteban Cambiasso on a one-year contract.
The 25-year-old has been drafted in by Mark Robins as cover for regular left-back Blair Adams, who suffered an injury in Saturday's 1-0 home defeat to Yeovil.
Dickinson has made 44 appearances for the Hornets since joining from Stoke in the summer of 2011, but he has found first-team chances hard to come by by this season.
He has been restricted to only six appearances under Gianfranco Zola, and has not played a senior fixture since November.
Dickinson spent a month on loan with Portsmouth early this season, and he will now be with League One Coventry until 12 March.