Titanium dioxide (TiO$_2$) nanoparticle (NP)-filled poly(vinyl alcohol-co-acetate) [PVA/Ac]–polyvinyl pyrrolidone (PVP) blend composite films were prepared with filler level (FL) ranging from 0.0 to 4.89 wt% by solution casting technique. Scanning electron microscope images showed the uniform distribution of the nanofiller (NF) at low FL and the aggregation of the filler at higher FLs. Energy dispersive X-ray spectrometry was used to determine the elemental constituents present in the composite samples. The ultra violet–visible spectral data of the prepared composite films, obtained in the wavelength range of 190–1000 nm, were exploited to investigate the linear and nonlinear optical properties. The incorporation of TiO$_2$ NPs in PVA/Ac–PVP blend resulted in decrease of the optical bandgap. The type of transition was found to be indirect allowed transition in k-space. The values of linear optical parameters, including absorption coefficient (${\alpha}$), refractive index (n), real (${\varepsilon}_1$) and imaginary (${\varepsilon}_2$) parts of dielectric constants of the composite films increased with increase in FL. Wemple and Didomenico method was used to determine the dispersion parameters.The value of high energy dielectric constant (${\varepsilon}_{\infty}$) extracted from two different methods were in good agreement with each other and were found to vary as a function of FL. Linear optical susceptibility (${\chi}^{(1)}$) and nonlinear optical parameters such as nonlinear refractive index ($n_2$) and third-order nonlinear optical susceptibility (${\chi}^{(3)}$) were enhanced due to the incorporation of the TiO$_2$ NPs in PVA/Ac–PVP. Sample with FL of 4.89 wt% exhibited a maximum $n_2$ value of 50389.1 ${\times}$ 10$^{–17}$ esu, while for pure PVA/Ac–PVP blend, it was 1.3 ${\times}$ 10$^{–17}$ esu. Thus, it can be seen that the incorporation of TiO$_2$ NPs has enhanced the optical properties of the resulting composite, and this material can be considered as a promising material for flexible optoelectronic applications.