$TiO_2$ doped with $Er^{3+;and;Yb^{3+}$ was used for fabricating a scattering layer and a nano-crystalline $TiO_2$ electrode layer to be used in dye-sensitized solar cells. The material was prepared using a new sol-gel combustion hybrid method with acetylene black as fuel. The $Er^{3+}$-$Yb^{3+}$ co-doped titanium oxide powder synthesized at 700oC had embossed structure morphology with a size between 27 to 54 nm that agglomerated to produce micron size particles, as observed by the scanning electron micrographs. The XRD patterns showed that the $Er^{3+}$-$Yb^{3+}$ co-doped titanium oxide had an amorphous structure, while using the same method without doping $Er^{3+};or;Yb^{3+},;TiO_2$ was obtained in the crystallite form with thea dominance of rutile phase. Fabricating a bilayer structure consisting of nano-crystalline $TiO_2$ and the synthesized $Er^{3+}$-$Yb^{3+}$ co-doped titanium oxide showed better scattering property, with an overall increase of 15.6% in efficiency of the solar cell with respect to a single nano-crystalline $TiO_2$ layer.