We investigate the use of Terahertz (THz) Time Domain Spectroscopy (TDS) as a tool for the measurement of the index dispersion of multi-walled carbon nanotubes (MWCNT) in polypropylene (PP) based composites. Samples containing 0.5% by volume concentration of non-functionalized and functionalized carbon nanotubes are prepared by melt compounding technology. Results indicate that the THz response of the investigated nanocomposites is strongly dependent on the kind of nanotube functionalization, which in turn impacts on the level of dispersion inside the polymer matrix. We show that specific dielectric parameters such as the refractive index and the absorption coefficient measured by THz spectroscopy can be both correlated to the index of dispersion as estimated using conventional optical microscopy.