The placement of a picture rail depends on the look you want to achieve and the ceiling height of your room. Generally, picture rails are placed between 9-13 inches from the ceiling, although it can be set any distance within reason.
For an average 8-foot ceiling, a picture rail placed 11-12 inches from the ceiling tends to look best. This will create a “border” highlighting the walls and the artwork. If you have higher ceilings, you can place it lower for more impact.
When hanging art, you can hang the artwork at any height you prefer. The higher the artwork placed on the picture rail, the greater the space between the artwork and the ceiling.
Whenever you’re in doubt, you can use a tape measure or ruler to determine the optimum placement of the picture rail, or measure the room’s height and then subtract 9 to 13 inches to get the desired placement.
Here is a useful link that might provide some useful information and help you to make the most of your picture rail.
http://www.dummies.com/home-garden/home-improvement/adding-artwork-picture-rail/