The 12-year-old girl had last been seen on in the Hele Park area of Newton Abbot, Devon, before her disappearance. She was first reported missing on December 20.
They said that she had been found during a raid on a property in Boston, Lincolnshire on Thursday, where the alleged kidnapper was arrested.
The man, 34, was arrested on suspicion of child abduction and kidnap.
He is now being transferred to Devon and Cornwall Police for questioning.
Leona is now being supported by specialist officers and child services.
In a statement, police said: “Officers would like to thank the public for their support in helping us locate Ms Peach.”