The on-loan midfielder was dismissed for his involvement in a scuffle with Lee Williamson, who was also shown red, midway through the second half.
He will now serve an immediate three-match ban, starting against Reading this Sunday.
Blues boss Alex McLeish said: "Lee was told by the referee (Phil Dowd) that he had been sent off for headbutting and the official appeared to indicate that at the time of the dismissal. We put forward our reasons in the form of statements and DVD evidence as to why we felt that wasn't the case.
"However it seems the FA have now said it was for a wider range of things, including the tussle, and our appeal was rejected.
"We are disappointed with the decision but are grateful to the FA for hearing the appeal and now have to get on with things despite losing the services of a key member of our squad."
Preston also saw their claim for wrongful dismissal relating to the same incident rejected earlier in the day, meaning Williamson will also serve a three-match ban, starting against QPR.