The new (0.96‐x)(K0.48Na0.52Nb0.96Sb0.04)O3‐0.04(Bi0.5Ag0.5)ZrO3‐x(Fe2O3‐In2O3) ceramics with high dielectric, and electromechanical coupling properties were designed. In this work, the effect of KNN‐based ceramics lattice distortion (c/a) and microstructure on the electrical properties was explored by varying the doping amount of Fe3+ and In3+. The problem of a large number of oxygen vacancies generated by the volatilization of K and Na can be well solved by introducing Fe3+ and In3+. The bulk density increases significantly and the maximum value is about 4.52 g/cm3.The sample with x = 0.003 has the smallest c/a, and exhibits the best piezoelectric and dielectric properties (d33 = 536 pC/N, εr = 3432 and kp = 55.8 %). Low doping concentration of Fe2O3 is considered a “soft” addition for KNN‐based piezoelectric ceramics. The study of this mechanism provides a new idea to regulate the electrical performance of KNN‐based ceramics.