Two goals from Ellen Molloy helped them secure a draw at The RSC just two days previous and Head Coach James Scott freshened things up by making five changes to his starting line-up.
One of the players who stayed in the team was McLaughlin and she repaid the faith shown in her by heading Ireland in front on 35 minutes after drifting into a dangerous area.
Iceland, who showed over the two games that they are a good team, replied on 57 minutes when Anita Yr Porvaldsdottir poked the ball in following a goalmouth scramble.
Scott's team thought that they had secured a winner on 71 minutes but it was ruled out due to an infringement on the Icelandic goalkeeper. So both teams had to settle for a draw.
Speaking after the game, Scott said: "We were aboslutely excellent over what were two really good tests. The biggest challenge in today's game was weather, where we scored in the first half against a gail force wind and they scored in the second half against it, so it was unusual that both teams scored against the wind.
"In the first game, we scored two really good goals - one of which from Ellen Molloy was a top class goal. Today, we again scored a good goal from a well-worked set-piece. Overall, we created a lot of chances and we are probably disappointed that we didn't win.
"All of the players played, so that will give us a lot of headaches about starting teams going into the qualifiers. Iceland are very similar to Denmark, who we have in our first game, so that puts us in good stead for that game. We are looking forward to those games and I think it will make for an exciting group with all teams feeling that they have a chance of qualifying."
Ireland will now turn their attention to next month's UEFA European Championship Elite Round qualifiers, which will be played in Waterford.
They will come up against Denmark (March 23), Serbia (March 26), and Austria (March 29) with top spot in Group 3 required in order to reach this summer's finals tournament in Sweden.
Republic of Ireland: Askalnyte; Crosbie (Brennan 57), Doherty, Watkins (Horgan 57), Kinneavey (Slevin 74); Clancy, Devanney (O'Dowd 74), Stapleton; Gibson (Molloy 57), McLaughlin (Corbet 87), Brown (Slattery 87).
Iceland: Magnusdottir; Sigurbjornsdottir, Petursdottir, Agustsdottir, Asmundsdottir, Bjarnadottir, Heioarsdottir, Jorundsdottir, Porhallsdottir, Asporsdottir, Porvaldsdottir.
Referee: Michelle O'Neill.