Adjust clutch freeplay

If the total overall throw is ~7". The first 2"- 2 1/2" are the dead inches where the pedal does not return to the top as mentioned before. This leaves the pedal at about the 4 1/2" - 5" mark off the floor. The clutch works almost immediately when pressed from the 4 1/2" - 5" mark. It's working range is about 2 1/2" - 3". To answer your question, It starts to engage about 2" off the floor.
I like my clutches to release about an inch off the floor, but thats just me. Get a look through the clutch fork hole in the bell, and see if you can determine the clutch style... Diaphragm or Borg Beck. As I stated, if Diaphragm you should remove the over center spring. Other that that , start looking for worn pivot points, worn bushings on the cross shaft and the like.