All you need to do is finish the game in offline mode. Any difficulty, continues is fine, you can even have a local co-op player with you if you'd like.
If you want to be able to change characters at continue, set it to 2P mode rather than 3P.
In 3P mode, P1 will be Lancelot, P2 will be Arthur and P3 will be Perceval.
ProTip: cutting large treasures or food items increases their point value, which in turn levels you up faster.