29-year-old mother Trudy Stock in Gosport, Hampshire said the discovery was made by her daughter Shani, 7, after she had prepared and served a home-cooked lasagne with the £3 mince.
Iceland has since apologised, compensating Stock with vouchers worth £30, reports ITV News.
The retailer stated: "Iceland has apologised to the customer and offered a gesture of goodwill, and we will carry out an investigation with our supplier to determine how it happened."
Stock said of the incident: "It's completely traumatised [Shani] now. She was in bucket of tears.
"She was enjoying it until she found that and burst out crying."