RE-Mg-Ni alloy is considered a highly promising anode material for the next generation of MH-Ni batteries. However, the low cycle life, fast performance, and high manufacturing cost of this ideal MH-Ni battery anode material have become obstacles to its optimization. In this work, an as-cast La0.7Sm0.3MgNi3.6Co0.4 superlattice alloy was prepared by vacuum medium frequency induction melting. Then, La0.7Sm0.3MgNi3.6Co0.4 + 10 wt% Ni (0–2 h) composite hydrogen storage alloys with excellent properties were prepared by adding a catalyst (Ni) and conducting ball milling. XRD, SEM, and HRTEM were conducted to analyse the phase compositions, microstructures and macrostructures of the samples. The experimental results showed that with the increase in ball milling time, the microstructural characteristics of the alloy changed, such as the phase abundance, grain refinement, particle size reduction, and amorphous structure increase, directly leading to the change in electrochemical performance. The discharge capacity (Cmax) of the sample decayed from 264.0 mAh/g to 219.1 mAh/g, the cycle stability (Sn) gradually increased with the extension of the grinding time, and the rate discharge performance first increased and then decreased. When the grinding time was 1 h, the best performance was HRD900 = 36.53%. The critical factors affecting the dynamic performance, such as the charge transfer resistance (Rct), limiting current density (IL), and hydrogen diffusion coefficient (D), all exhibited the same trend and reached their respective optimal values at 1 h.