Blues will be without the Scotland forward for the game at The Hawthorns after he sustained anterior cruciate ligament damage to his left knee in training on Friday.
McFadden will see a specialist on Monday with a view to surgery but is expected by the club to be out of action for the foreseeable future.
New signings Alexander Hleb and Jean Beausejour are both fit to play, although the latter will start on the bench due to jet lag and a lack of training time.
Hleb may still join him amongst the substitutes, as McLeish is yet to decide whether the Belarus international will start the game due to his fitness level and the team's impressive performance against Liverpool on Sunday.
The match has come too soon for striker Kevin Phillips, who is back in full training, but not yet fit enough to face his former club. Stuart Parnaby has also resumed training.
Birmingham (from): Taylor, Carr, Murphy, Bowyer, Johnson, Ridgewell, Larsson, Gardner, Jerome, Ferguson, Doyle, Dann, Madera, Fahey, Zigic, Valles, Parnaby, Beausejour, O'Shea, Foster, Redmond, Jiranek.