Eriksson has been eager to bring in a stopper to challenge for Chris Weale's number one shirt and Ricardo looks to fit the bill as the City boss puts the finishing touches to his sides January transfer make over.
The City boss told BBC Sport: "I am delighted. He has impressed during his time at the club and brings extra competition.
"He is an excellent shot-stopper with agility and great confidence."
The 34-year-old has a wealth of experience at both club and international level - where he has won 79 caps for Portugal - during a career that has spanned over three decades.
Ricardo's illustrious 18 year career has seen him operate in the Portugues league with hometown club Montijo, moves to Boavista and Sporting Lisbon followed before a move to Spanish La Liga outfit Real Betis.
But, the goalkeeper's greatest performances have came when he has represented his country on the international stage at the Euro's in 2004 and 2008 either side of the World Cup in Germany 2006.
Ricardo will be known in England for his penalty kick heroics against Eriksson's Three Lions in Euro 2004 when he saved Darius Vasell's spot kick before converting the winner to send Portugal into the Semi-Finals of the competition.
The 'keeper then repeated his feat two years later, becoming the first player to save three penalty kicks in a World Cup penalty shoot-out when he again blew away English hopes in Germany 2006.
Eriksson added: "He has played at the highest level and will be a great addition to our squad. Plus, he owes me after 2004 and 2006 so I'm sure he will be keen to do well for us."
The 'keeper is unlikely to feature in Eriksson's plans when his Foxes travel to Sheffield United in the Championship tomorrow night but should be available for the visit of Barnsley to the Walkers Stadium on Saturday.