I made quillows out of fleece before and I just decided how large I wanted the blanket to be, then divided that by 3 for the finished size of the pocket.
I sewed the pocket on the top center of the blanket with the opening at the top, so when you fold the sides in, then fold towards the top, it is easy to flip the pocket inside out to become the pillow.
This was a huge hit with my kids, the nieces and nephews. etc. Especially useful for road trips!