The size, doping concentration, and magnetic field dependences of the magnetization M and the real part of the dielectric function ε' in doped LaFe1−xnormalMxnormalO3 nanoparticles (NPs) are studied using a microscopic model. Although M increases, ε′ decreases with decreasing NPs size in pure LaFeO3. Doping with different ions causes different strain which modifies the exchange interaction. As a consequence, M and ε′ grow with increasing Mn or Zn ion doping, whereas both quantities decrease by doping with Ti or Al ions. The magneto‐dielectric coefficient increases with an applied external magnetic field and Mn doping concentration in pure and Mn‐doped LaFeO3 indicating that pure and doped LaFeO3 NPs exhibit a multiferroic behavior. A microscopic model is proposed to study multiferroic Bi2NiMnO6 thin films.