Franchitti was clocked at 222.360 and Dixon at 222.274.
The race will be Sunday at the Indianapolis Motor Speedway, where the forecast calls for temperatures in the 90s.
"It was slippery out there today, more so than all month," two-time Indy 500 winner Franchitti said after 42 practice laps around the 1.5-mile track.
He won the race in 2007 and 2010.
"We didn't make a whole lot of changes and the car felt pretty strong," said Dixon, the 2008 winner.
Franchitti and Dixon will start in the middle of the 33-car field.
Three-time Indy 500 winner Helio Castroneves had the 11th fastest practice time.
Notable deaths of 2014 [PHOTOS]