For terminals that support only Latin-1 (ISO8859-1), Latin-2 (ISO8859-2), or KOI8-R, you should have the following STREAMS configuration:
head <-> ttcompat <-> ldterm <-> u8lat1 <-> TTY
This configuration is only for terminals that support Latin-1. For Latin-2 terminals, replace the STREAMS module u8lat1 with u8lat2. For KOI8-R terminals, replace the module with u8koi8.
Make sure you already have the STREAMS module loaded into the kernel.