Can I blow dryer exhaust into a pillow case or sheet?
I'm presuming you're using the pillow case as a lint filter.  The bigger problem will be humidity.  You'll be putting all of the moisture from the wet clothes into the air.  After a couple loads, this makes the room really, really, REALLY humid (I've been there).  

If you can swing it, you might be well off getting some flex dryer duct and running the end out the window while you're doing laundry.  Then you won't need the pillowcase at all, which might cause some other problems due to back pressure/poor airflow (e.g., it might take longer for your clothes to dry, and it might cause the dryer to run hotter).