The striker, on loan at the Kirkcaldy club from the Foxes, scored the only goal in the first-leg at Starks Park.
"I said to the boys, it's the year of the underdogs and we're the underdogs going into this," said Panayiotou.
"Leicester had nothing to lose and we had nothing to lose."
The 21-year-old came off the bench after 65 minutes and powered in a header from a corner 10 minutes later.
"I've been texting and congratulating everybody [at Leicester], but I can't get carried away with that," he added.
"I need to do my job now, we need to get promoted and if we do that, I'll be the happiest man alive."
Panayiotou's mood was in stark contrast to Alan Stubbs' demeanour after the match. His Hibs side dominated the game for long spells and created a number of chances, but were left to rue poor finishing and a momentary lapse of concentration at the back.
The visiting manager was also frustrated with the match officials throughout, but particularly for a claim for handball inside the Raith penalty area only moments before the goal.
Referee Kevin Clancy did not award the spot kick, much to Stubbs' annoyance.
"At this stage in the season, in this format, you want the best officials," Stubbs said. "I'm afraid the officials got it horribly wrong.
"Our frustration comes from conceding from a set piece, we've lost concentration and we should have dealt with it. The other frustration is not taking some of the opportunities we've had.
"The pitch is a leveller, it's a very difficult surface to play on. But the pitch is not the reason we've not won the game. The reason is we missed some chances and we switched off at one set piece.
"It's half-time [in the tie], but we've made it more difficult than it should have been. We know what we've got to do, we were going to be on the front foot anyway and look to really take the game to Raith.
"We've got an opportunity at home to come through the tie and it just makes for a rip-roaring occasion. I just hope the officials get it right."
Raith manager Ray McKinnon felt the result was a reward for the character of his side, and praised his players for their attitude and approach.
"The game was exactly how we thought it would pan out, and the longer we stayed in the game we thought we would get our chance," he said. "Fair play to the lads dug in and ground out another result.
"I've got very good characters in that dressing room, they don't want to lose, they're determined to win.
"It's going to be an extremely tough game [at Easter Road], they're going to throw everything at us. We need to do what we do, work hard. There's nobody getting carried away here."
McKinnon also reiterated that speculation about an impending approach for his services by Dundee United will not disrupt his preparations.
"My focus is solely on Raith Rovers and I'm determined to give it everything," he said of the speculation. "It doesn't 't affect me."

William Gowan, 38, had received details of driving test candidates weeks in advance.
Gowan, from Ardminnan Road, Portaferry, County Down, pleaded guilty to six counts of misconduct.
He received details of 21 candidates sitting driving tests before their test dates. The court was told texts had been received from two mobile phones.
The court also heard that Gowan had run to the toilet with his phone in his hand when the police arrived to speak to him.
Sentencing him, the judge said Gowan had betrayed the trust placed in him.
He said the offence would fully deserve a custodial sentence, but giving him some credit for his guilty plea and taking into account his clean record and low risk of re-offending, he was prepared to mark this "quite disgraceful behaviour" with a non-custodial sentence.
Gowan received the maximum community service order of 240 hours. The judge warned him he was escaping prison "by the skin of his teeth" and would not get a second chance.
Harry Panayiotou revealed that Leicester City's Premier League triumph was an inspiration for Raith Rovers' Premiership play-off quarter-final victory over Hibs.
[NEXT_CONCEPT]
A driving examiner has been sentenced to 240 hours community service for misconduct in public office.