A sol-gel synthesis method was used for the synthesis of pure CoFe2O4 (CFO) as well as Graphene Quantum Dots (GQDs) decorated CoFe2O4 Hybrid Nanocomposite (GCHN). From X-ray diffraction (XRD) data it was analyzed that both these samples have a cubic structure with Fd-3m space group. Using Debye-Scherer's equation, the average sizes were determined to be 24.48 and 13.74 nm, respectively. FTIR spectra revealed details about vibration bands and functional groups present. Raman spectra confirmed existence of GQDs in GCHN with an ID/IG ratio of ∼0.8. The results of Field emission scanning electron microscopy (FESEM) analysis exhibited microstructural morphological details having shapes of grains to be non-uniform in shape. UV–visible data was used to calculate band gap (Eg) energy by using Tauc plot method and found to be 2.52 eV and 2.99 eV respectively for CFO and GCHN. Urbach energy (EU) was found to be 1.03 and 1.19 eV for CFO and GCHN respectively. The dielectric properties of GCHN were analyzed for dependence on frequency and temperature and explained by Maxwell-Wagner-type polarization. The frequency-dependent ac conductivity (σac) followed Jonscher's power law and investigated dynamics of ion hopping. Impedance spectroscopy was used to further evaluate Nyquist plots with respect to temperature as well as magnetic fields to estimate grain and grain boundary contributions. This was further used to evaluate electrical characteristics such as relaxation time (τ). Activation energies (Ea) calculated using relaxation times were found to be 0.48 eV for CFO while 0.22 and 0.92 eV for GCHN respectively. At room temperature, CFO and GCHN exhibited a strong magneto-dielectric coupling (MD) and showed negative magneto-dielectric properties in low-frequency regions. At room temperature (RT), magnetization values of CFO and GCHN displayed were 38.48 and 7.52 emu/g respectively. The lower magnetization value was possibly due to shielding by GQDs in GCHN. These properties enable it to be used as a potential application in microelectronic systems, spintronics, optical and optoelectronic devices, magnetic resonance imaging (MRI) and memory devices.