A novel composite electrolyte incorporating inorganic NiO nanosheets into iodide/triiodide liquid electrolyte containing 4-tert-butylpyridine (TBP) for dye-sensitized solar cells (DSCs) was reported herein for the first time. The hydrothermally prepared NiO nanosheets showed a high aspect ratio, confirmed by field emission scanning electron microscopy (FESEM). DSCs assembled with such nanosheet-based composite electrolytes showed more than 15% increased photocurrent, and hence significantly promoted light-to-energy conversion efficiency relative to reference one. The enhancement of photocurrent is primarily due to the light-scattering effect which is brought by the incorporating of inorganic nanosheets. Also, electrochemical impedance spectroscopy (EIS) was employed to investigate the charge-transfer kinetics at the interface between the counter electrode and the composite electrolyte of DSCs. The symmetrical cells (TCO/Pt/electrolyte/Pt/TCO) assembled with such nanosheet-based composite electrolyte showed a decreased charge-transfer resistance (R(ct)). The optimum DSC including NiO nanosheets showed a short-circuit current of 14.01 mA/cm2, an open-circuit voltage of 0.73 V, a fill factor of 0.54, and an overall conversion efficiency of 5.44% at 100 mW/cm2.