In the present work we have reported the results of investigations on local structures of e-beam evaporated (Gd2O3-SiO2) composite thin films by synchrotron based EXAFS measurements. The evolution of local structure in the case of the Gd2O3-SiO2 system is found to be different from the HfO2-SiO2 system reported by us earlier. The EXAFS analysis has shown that the Gd-O bond length decreases monotonically as SiO2 content in the films increases. Also the amplitudes of the peaks in the FT-EXAFS spectra of the samples, which depend jointly on the coordination numbers as well as the Debye-Waller factors (measure of disorder) are found to decrease monotonically with increase in SiO2 contents in the Gd2O3 matrix. Atomic force microscopy (AFM) measurements of the samples also show continuous evolution of amorphous-like denser microstructure with increase in SiO2 content in the films. Hence incorporation of SiO2 in the Gd2O3 matrix, results in a continuous change in oxygen coordination yielding a change in the Gd-O bond length and also results in a continuous increase in amorphousness and a smoother morphology of the samples and, unlike the HfO2-SiO2 system, does not show any maximum for a particular SiO2 concentration.