We study the renormalization of Entanglement Entropy in holographic CFTs dual to Lovelock gravity. It is known that the holographic EE in Lovelock gravity is given by the Jacobson-Myers (JM) functional. As usual, due to the divergent Weyl factor in the Fefferman-Graham expansion of the boundary metric for Asymptotically AdS spaces, this entropy functional is infinite. By considering the Kounterterm renormalization procedure, which utilizes extrinsic boundary counterterms in order to renormalize the on-shell Lovelock gravity action for AAdS spacetimes, we propose a new renormalization prescription for the Jacobson-Myers functional. We then explicitly show the cancellation of divergences in the EE up to next-to-leading order in the holographic radial coordinate, for the case of spherical entangling surfaces. Using this new renormalization prescription, we directly find the C−function candidates for odd and even dimensional CFTs dual to Lovelock gravity. Our results illustrate the notable improvement that the Kounterterm method affords over other approaches, as it is non-perturbative and does not require that the Lovelock theory has limiting Einstein behavior.