It actually lives in the Louvre, although a copy is at Rennes-le-Chateau.

It was probably painted for someone for whom St Peter Celestine was a patron saint or who otherwise had an important connection with him. It may have been in a private chapel or in a small nave at a local church.

The fact that Francois is there in the background may be to help with the notion that his kingship would be blessed & was also holy. The French kings were almost priest-kings in that they were consecrated as well as crowned. They believed that this consecration set them apart (first among equals) and permitted them to cure people by virtue of their touch. We see the vestigial remains of this belief whenever a head of state or member of the Royals visits a hospital.