Knight spent two spells on loan at the Weston Homes Stadium in the 2018/19 and 2019/20 seasons, but was used mainly as an athletic midfielder.
He scored three goals in 23 starts, but also suffered a couple of bad injuries.
But the 23 year-old has spent this season on loan at the Championship’s worst club Wycombe Wanderers and he’s been excellent in his preferred position as a centre back.
Knight has played 37 times for Wycombe scoring twice, but is currently serving a suspension after picking up the first red card of the season in a recent defeat against Luton.
Knight is believed to be out of contract at Leicester at the end of this season.
Posh co-owner Darragh MacAnthony has said Posh could try and sign Knight on a permanent basis if Posh reach the Championship.