Multiferroic lead lanthanum titanate–cobalt iron oxide nano-composite thin films are synthesized by sol-gel route. A percolative distribution of cobalt iron oxide phase, with percolation threshold ∼8 vol%, is identified in these films. Large magnetoelectric coupling coefficient (∼250 mV/cm.Oe) is found in the composite films with cobalt iron oxide volume contents in the vicinity of its percolation threshold. The composite films with dilute magnetostrictive volume contents yield superior multiferroic properties to its counterparts with relatively higher magnetostrictive volume contents.