Plasticized blend polymer electrolytes comprising of polyethylene glycol (PEG) as the plasticizing agent in polyethylene oxide (PEO)-methylcellulose (MC) blended polymer loaded ammonium iodide (NH4I) were prepared by standard solvent cast technique. Impedance analysis was used to detect the change in ionic conductivity due to incorporating various stoichiometric of PEG in the matrix. The diameter of the Cole-Cole plots semicircle decreased with increasing temperature, while the inclination of the spike region increased with increasing temperature, indicating the reduction in bulk resistance. Plasticized blend polymer electrolyte incorporated with 10 wt% of PEG was found to exhibit higher ionic conductivity of 3.37 × 10−3 S.cm−1. Temperature- and frequency-dependence of conductivity is found to follow Vogel Tammann Fulcher's relation and Jonscher power law, respectively. The unplasticized sample follows the overlapping large polaron tunneling (OLPT) model, whereas the highest conducting plasticized sample exhibits the non-overlapping small polarons (NSPT) model. The dielectric constants increase continuously with an increase in temperature due to increases in the polarization which leads to high dielectric loss. The shift in the imaginary modulus spectra towards high frequencies suggested a reduction in the dielectric relaxation time of the system.