Instruction tuning has been identified as a crucial technique for optimizing the performance of large language models (LLMs) in generating human-aligned responses. Nonetheless, gathering diversified and superior-quality instruction data for such tuning presents notable obstacles, especially in domains with rigid privacy provisions. Federated instruction tuning (FedIT) has emerged as a promising solution, by consolidating collaborative training across multiple data owners, thereby resulting in a privacy-preserving learning model. However, FedIT encounters limitations such as scarcity of instructional data and risk of exposure to training data extraction attacks. In this paper, we propose a novel federated algorithm, FewFedPIT, designed to simultaneously enhance privacy protection and model performance of federated few-shot learning. FewFedPITcomprises three vital components on the client side: (1) synthetic data generation, which utilizes LLMs' in-context learning capacity to generate synthetic data autonomously, thus expanding the local database; (2) parameter isolation training, which individually updates the public parameters in the synthetic data and the private parameters in the local data, consequently mitigating the noise impact of the synthetic data; (3) local aggregation sharing, which mixes public and private parameters before uploading, effectively preventing data extraction attacks. Extensive experiments on three open-source datasets demonstrate the effectiveness of FewFedPITin, enhancing privacy preservation and improving federated few-shot performance.