First of all, you're better off using a set
to hold your dictionary words, for better lookup speeds. Also, it would help to lowercase all the words in your dictionary to make comparisons more uniform.
with open('dictionary.txt') as infile:
dictionary = {line.strip().lower() for line in infile}
print("----Linear search-----")
with open('AliceInWonderLand200.txt') as infile:
for i,line in enumerate(infile, 1):
line = line.strip()
words = split_line(line) # your split_line function
for word in words:
if word.lower() not in dictionary:
print("Line ", i, ": probably misspelled: ", word)
Hope this helps