The Foxes pulled five points clear at the top of the Premier League table on Monday night thanks to their narrow win over the Magpies in front of their home fans.
The result left Leicester 11 points ahead of Arsenal and 12 in front of City heading into their final eight games of the season, although both teams have a game in hand over the leaders.
However, former Birmingham City midfielder Savage feels that the distance is now too great for Arsenal and City to be able to recover.
Speaking to BBC Sport after Leicester’s win on Monday night, ex-midfielder Savage said: “Eleven clear of Arsenal, 12 points ahead of Manchester City… all the money those teams have spent – it’s unbelievable.
“It’s ridiculous to think of Leicester being be so far ahead of those. It’s a two-horse race, no doubt about it. City are out of it, Arsenal are out of it.”
Arsenal take on Barcelona in the Champions League on Wednesday night before preparing for a trip to Everton in the Premier League on Saturday lunchtime.
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