The 2016 PFA players' player of the year started for the visitors despite speculation surrounding a transfer to Arsenal and he showed just what the East Midlands outfit would miss if he does leave with a display full of flair and attacking intent.
Mahrez was at the heart of the game's best moments and went close with curling first-half effort that arced inches wide before lighting up the stadium with a stunning strike within seconds of the restart.
Celtic improved as the match progressed and drew level when O'Connell coolly side-footed a 25-yard effort into the far corner after a minor melee in the Foxes area.
The hosts may be further into their pre-season preparations but it was Claudio Ranieri's men who looked the more likely for large spells in this 'Battle of Britain' with Leonardo Ulloa and the impressive young full-back Ben Chilwell missing gilt-edged openings in a goalless first half.
Jamie Vardy was absent but Ranieri will be pleased with how new signings Ron-Robert Zieler, Luis Hernandez and Nampalys Mendy - signed from Nice to replace N'Golo Kante - all performed.
The Foxes' Italian boss could be forgiven for being pre-occupied with off the field events as he looks to keep his title-winning stars together but will still be relishing a pre-season schedule that means his champions will meet the likes of PSG, Barcelona and Manchester United in the Community Shield.
Leicester's Wes Morgan and manager Claudio Ranieri celebrate with the trophy and team mates at the end of the match
Image credit: Reuters
Celtic manager, Brendan Rodgers will be happy with how his side responded to falling behind and will look to build on the positives ahead of a tricky Champions League qualifier against Astana in Kazakhstan on Wednesday.
FarewellMahrez? The tricky Algerian made the difference in countless matches in last season's historic title-winning campaign, so he was always going to have suitors. Ranieri was relieved to see Jamie Vardy snub Arsenal's overtures but despite suggesting Mahrez would also stay put recently, media reports claim the Foxes could well be about to lose another key man. N'Golo Kante was important in the engine room but losing Mahrez will be the biggest blow of all. The 25-year-old offers an 'X' factor few can produce on a regular basis and you wonder just where Leicester could end up this season, juggling Europe and a title defence, without such a significant contributor in the final third.
MAN OF THE MATCH
Riyad Mahrez (Leicester City). Superb throughout his 71 minutes on the pitch. Created chances and scored a quite brilliant goal. Deservedly got an ovation from both sets of supporters when he went off for what could be his Foxes swansong.
CELTIC: Gordon 6; Janko 7, Lustig 6, O’Connell 7; Roberts 6, McGregor 6, Brown 6, Armstrong 6, Izaguirre 6; Griffiths 6, Dembele 7. Subs: Johansen 6, Ambrose 6, Ciftci 6, Christie 6, Rogic 6, Allan 6, Forrest 6.
11' - LEICESTER CHANCE! A slick Leicester counter sees Mahrez feed Drinkwater on the overlap. He whips a lovely ball to the far post for Ulloa who should score but is denied by a last-ditch challenge by Janko.
25' - LEICESTER CHANCE! Mahrez kills the ball dead and drives in from the right before curling a lovely effort inches past the far post.
34' - LEICESTER CHANCE! CLOSE! Mahrez delivers a searching cross to the left of the area where Chilwell arrives to power a free header straight at Gordon.
38' - CELTIC CHANCE! Griffiths hammers the 22-yard free kick towards the far post where Zieler pushes it away at full stretch. Fine effort from the Celtic hitman.
Leicester's Shinji Okazaki scores during the penalty shootout
Image credit: Reuters
46' - GOAL! CELTIC 0-1 LEICESTER. GOAL! It's Mahrez and it was coming. The Algerian jinks down the right and into the area. He twists and turns before cutting back onto that trusty left foot and curving a wonderful effort into the far corner.
59' - GOAL! CELTIC 1-1 LEICESTER. GOAL! Eoghan O'Connell levels! The centre back coolly places a 25-yard shot into the bottom corner after the ball had pin-balled around the Leicester box.
90' - LEICESTER CHANCE! Okazaki flicks a header over the top after making a fine run to meet Simpson's clever near-post cross.