The diffraction properties of a twisted nematic liquid-crystal (TN-LC) grating, in which a dichroic dye was doped, were investigated experimentally in terms of the applicability to an optical system for determining the polarization angle of incident linearly polarized light. The main reason to dope a nematic LC material with a dichroic dye was to enhance the polarization dependence of the diffracted light intensities for the positive and negative first orders. We found the best values of the applied voltage for application in polarization angle measurement. The TN-LC grating with a high polarization sensibility was applied to the optical system for measuring the concentration of an optically active component in a liquid specimen. As a result, the applicability of the proposed optical system was revealed experimentally. Furthermore, the cause of the random measurement error is discussed briefly.