I figured this out myself.
Download fixPSlinestyle.m from Matlab File exchange here. http://www.mathworks.com/matlabcentral/fileexchange/17928-fixpslinestyle
Around line 60 of this script is a line that controls the resolution of the dotted lines. Here is what it looks like:
dotLine = sprintf('/DO { [3 dpi2point mul 3 dpi2point mul] 0 setdash } bdef\n');
^ ^
| |
The two '3's you see in this line are the numbers that control the spacing of the dashed lines. Increasing the first one increases the length of the dashes, and increasing the the second increases the white space between the dashes. I am not certain about the specifics on these numbers, but you can play with their values until you get a result that looks good for your figure. Note that this will affect all the dotted lines in your figure, not just the grid.