Poor dispersion of graphene in non-polar polymer matrices creates composites with limited applications. A method to improve the dispersion of graphene in polyethylene (PE) via blending PE with oxidized PE (OPE) is examined. Graphene was produced by simultaneous thermal exfoliation and reduction of graphite oxide. Nanocomposites of graphene with PE as well as graphene with PE/OPE-blends were prepared by solvent blending. Improved dispersion of graphene in PE/OPE blends substantially decreases percolation from both rheological (0.3 vol%) and electrical (0.13 vol%) measurements compared to neat PE nanocomposites (1 and 0.29 vol%), respectively. A universal Brownian dispersion of graphene in polymers was concluded similar to that of nanotubes, following the Doi-Edwards theory. Micromechanical models, such as Mori-Tanaka and Halpin-Tsai models, modeled the mechanical properties of the nanocomposites. The nanocomposites microstructure, studied by small angle x-ray scattering, confirmed better dispersion of graphene at lower loadings and the formation of surface fractals in the blend/graphene nanocomposites; whereas only mass fractals were observed in neat PE/graphene nanocomposites.