Measurements of the real and imaginary parts of the dielectric permittivity of reduced Ti-doped lithium niobate reveal a low-frequency dielectric relaxation as well as a strong increase in the conductivity compared to undoped samples. The low-frequency permittivity is increased by about an order of magnitude due to the relaxation. The analysis of the temperature-dependence of the relaxation frequency reveals a thermally activated behavior with an activation energy of Ea = 0.65 eV, which is in agreement with a transition between NbLi4+ small bound polarons and NbNb4+ free polarons. Both low-field ac conductivity and high-field dc conductivity indicate a Poole-Frenkel-type electron hopping mechanism between NbLi4+ sites at low temperature, turning into similar hopping between NbNb4+ at high temperatures.