Larsson, whose contract runs out in the summer, has been the subject of interest from Newcastle and Blackburn during the transfer window. A deal failed to materialise however and he will remain at St Andrew's for the next five months.
Larsson was booed by Blues fans when he came on as a second-half substitute during Saturday's 5-0 mauling by Manchester United at Old Trafford.
McLeish said: "The stick Seb got was disappointing. I would like to think the fans will not jeer Seb."
He added: "It is the way football is in the modern day. I don't think there is a great desire for Seb to leave the club but he has got to do what is right for him and his family.
"We must respect that and I'd love the fans to give him a rousing reception if he is playing.
"I've worked with guys on the verge of a Bosman transfer before and they down the tools - but Seb wants to play football.
"He has made that clear to me and it lets him escape from the madness that is surrounding his contract talks and the future.
"Is Larsson here for the rest of season? Yes. There will be nothing happening in the next few days.
"It is great. It means another strong player in the squad."