We report results of a muon spin rotation and relaxation ($mu$SR) study of dilute Pd$_{1-x}$Ni$_x$ alloys, with emphasis on Ni concentrations $x =$ 0.0243 and 0.025. These are close to the critical value $x_mathrm{cr}$ for the onset of ferromagnetic long-range order (LRO), which is a candidate for a quantum critical point. The 2.43 and 2.5 at.% Ni alloys exhibit similar $mu$SR properties. Both samples are fully magnetic, with average muon local fields $langle B^mathrm{loc}rangle =$ 2.0 and 3.8 mT and Curie temperatures $T_C =$ 1.0 and 2.03 K for 2.43 and 2.5 at.% Ni, respectively, at $T = 0$. The temperature dependence of $langle B^mathrm{loc}rangle$ suggests ordering of Ni spin clusters rather than isolated spins. Just above $T_C$ a two-phase region is found with separate volume fractions of quasistatic short-range order (SRO) and paramagnetism. The SRO fraction decreases to zero with increasing temperature a few kelvin above $T_C$. This mixture of SRO and paramagnetism is consistent with the notion of an inhomogeneous alloy with Ni clustering. The measured values of $T_C$ extrapolate to $x_mathrm{cr}$ = 0.0236 $pm$ 0.0027. The dynamic muon spin relaxation in the vicinity of $T_C$ differs for the two samples: a relaxation-rate maximum at $T_C$ is observed for $x$ = 0.0243, reminiscent of critical slowing down, whereas for $x =$ 0.025 no dynamic relaxation is observed within the $mu$SR time window. The data suggest a mean-field-like transition in this alloy.
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