TiO2 nanoparticles (NPs) were prepared by the sol-gel method and then encapsulated with different thicknesses of SiO2 as a shell using the Stöber method. The crystal, chemical structure, and morphology of the core-shell TiO2@SiO2 NPs were characterized using XRD, FTIR, and TEM techniques. The amorphous nature of the shell (SiO2) was shown by XRD examination, which influenced the crystallinity of the TiO2 NPs, while FTIR data verified the association between SiO2 and TiO2, and a TEM study validated the coating of TiO2 NPs with SiO2. The optical absorption of TiO2 NPs was characterized by a sharp absorption edge around 343 nm, which redshifted to a higher wavelength region with increasing shell thickness. The direct bandgap decreased as the shell thickness of TiO2@SiO2 increased. The measurements revealed a clear trend, with the bandgap values falling from 3.97 eV for TiO2 to 3.60, 3.37, and 3.26 eV for shell thicknesses of approximately 2.5, 5.5, and 8 nm, respectively. Significant improvement in the optical conductivity of TiO2 NPs was observed with an increase in shell thickness, accompanied by an increase in refractive index and extinction coefficient. This enhancement could potentially lead to breakthroughs in the field of nanotechnology. The Wemple-DiDomenico model was applied to compute the nonlinear refractive index (n2), first- and third-order (χ(1) & χ(3)) susceptibilities values. The addition of a SiO2 shell to the TiO2 core resulted in a remarkable improvement in all nonlinear optical parameters. The (χ(3)) value was increased from 2.08 × 10−14 for pure TiO2 NPs to 3.04 × 10−09 for the core-shell TiO2@SiO2 sample with a shell thickness of 8 nm.