NZFO/BTO ceramic composites with different ferrite contents were successfully prepared by a sol–gel in situ method. X-Ray diffractometry (XRD), scanning electron microscopy (SEM), vibrating sample magnetometry (VSM) and impedance analysis were used to reveal the microstructure and magnetic properties of the as-prepared composites. The influence of the non-magnetic phase on the magnetic properties of the composite was analyzed based on the composition dependence of the microstructure, effective permeability, saturation magnetization and coercivity. It reveals that a transition of topological structure appears when the volume fraction of the NZFO phase approaches the percolation threshold f_c = 0.55. In the composites below f_c, the magnetic particles are surrounded by a non-magnetic phase, and the magnetic properties are controlled by both the demagnetizing field and domain wall motion in the ferrite phase. However, in the composites above f_c, the magnetic particles are completely coalescent with each other, thus the magnetic behaviors are closely dependent on the anisotropic field of the ferrite phase. The magnetic properties of the NZFO/BTO ceramic composite synchronously exhibit a critical behavior at the percolation threshold.