To meet the demands of higher operating temperatures in aero-engines, yttrium oxide fully stabilized cubic (C) phase hafnium oxide (YFSH) has emerged as a promising candidate for thermal barrier coatings due to its ultra-high melting and phase transition temperatures. However, its application is constrained by its inherently low fracture toughness. To enhance the fracture toughness of C-HfO2 phase ceramic, the metastable non-equilibrium tetragonal (T’) phase of Y0.08Zr0.92O1.96 (YSZ8) was synthesized using the sol-gel method. An Al2O3 layer was then coated on YSZ, forming a T’-YSZ@Al2O3 core-shell structure (with Al2O3 comprising 20 % of the YSZ volume). The phase organization stability and diffusion resistance of this T’-YSZ@Al2O3 core-shell structure were investigated. Composite ceramic bulks, with compositions x T’-YSZ@Al2O3/(1-x) YSH24 (where x is the volume fraction, x = 0, 0.1, 0.2, 0.3, 0.4), were prepared using spark plasma sintering (SPS). The impact of the T’-YSZ@Al2O3 addition on the fracture toughness of the YSH24 matrix and the toughening mechanisms were analyzed. The results indicate that the introduction of the T’-YSZ@Al2O3 core-shell structure with good structural integrity into YSH24 ceramics prevents phase transitions. As the volume fraction of the core-shell structure increases from x = 0–0.4, the fracture toughness initially rises and then decreases, reaching a maximum of 2.36 MPa·m1/2 at x = 0.3. This value represents a 38.8 % improvement compared to that of the single C-HfO2 phase YSH24 bulks. The primary toughening mechanism is attributed to the ferroelastic domain switching of T’-YSZ within the T’-YSZ@Al2O3 core-shell structure.