Ted Needlemeyer is the grandfather of young Ned. The two seem to be very close, as shown by the dialogue they share within the game, and the fact that the entire Graveyard Nightmare is a symbolism of Ned's fear of his grandfather dying. Grandpa Ted is the Graveyard Shadow's true identity.
However, Ted urges Ned to stop worrying, stating that they still have lots of fun things to do. He also mentions that Ned should call him when he wakes up; whether Grandpa Ted was actually experiencing the nightmare or is just a figment of Ned's overactive imagination is unclear, but he is mostly probably unaware of the entire event. He also mentions that him and Ned could go see a monster movie sometime.
Ted is slightly hunched over and carries a walking stick. He has a purple mustache and wears a small purple top hat but, like Ned, he has very little head hair and wears glasses. He wears a green shirt with a purple waistcoat on top, checkered green and purple pants with purple bowling shoes with badly tied laces. He holds an umbrella in his other hand.
- Ted: Hey, Ned! Don't look so scared. It's me, Grandpa Ted!
- Ned: Gramp?
- Ted: The one and only!
- Ned: Are you...dead?
- Ted: Well, not yet...so stop the worrying. We still have places to go, things to do, just me and you. Call me when you wake up and I'll take you to a monster movie.