I think that Blake might have meant that Milton presented Satan as a heroic figure in his epic poem Paradise Lost. One of the characteristics of epic poetry is that there is a hero, a character that is greater than life. In Paradise Lost, there is no real hero but the character that comes closest to the definition of hero is Satan. Making Satan the hero, however, contrasts with Milton's purpose in Paradise Lost, so that is why Blake could say that Milton was in the devil's party without knowing it - he did not mean to present Satan as a hero, but he did.
If one understand's Milton's Christianity, however, there is no way that one could say that Milton favored Satan and what he represents, or that Milton felt sorry for Satan. Rather, I believe that when the poem is read as strictly literature, then Satan is strictly a character, and therefore larger than life and, in that sense, heroic. Do not forget that Satan was once "the angel of light" and as such, was very beautiful and compelling. The Bible, on which Milton's epic was based, warns that Satan is more dangerous when he appears in disguise as an "angel of light" than as a "roaring lion, seeking whom he may devour." So when we read Paradise Lost strictly as literature, we tend to cheer for Satan.
That said, the work must be put in its context and the purpose of the author must be considered to answer your question. Milton would have believed that Satan was a real evil, a real spirit, not just a character in literature, even though he presents him that way and gives him a voice. So I don't think that Milton "was of the devil's party" without knowing it.
The devil crops up in a lot of literature (especially in American Literature in early Puritan writers) as a somewhat benign sinister character who can be outwitted by humans (as in The Devil and Daniel Webster), but in Milton's world, he would not have seen Satan in this way. If you read the information here on eNotes, you can find out more about this. Here is an excerpt from the "style" link on the Paradise Lost page.
Satan's character exposes the true danger of evil, which lies in the very fact that it is attractive. Through Satan, Milton exposes the false view of heroism as "egotistical magnificence" and the equally false idea that heroic energy is admirable, even when exercised in a bad cause (Daiches, Milton ).
To complete your assignment, once you have decided whether you agree or not with Blake, you will have to find passages in the work that support your view, but look for passages in which Satan appears as an "epic hero" and this should help. This would occur, for example, when he is talking to his demons - he is a strong leader.