To improve the system efficiency and fuel economy of a traditional sport utility vehicle called “Warrior”, a type of mild hybrid powertrain system based on the automobile exhaust thermoelectric generator (AETEG) and the integrated starter/generator (ISG) was established, and its parameter matching was optimized in this paper. Firstly, the effects of different components parameters on the performance index of the mild hybrid powertrain system were evaluated to decide the initial matching parameters. Then, all the component parameters of the ISG mild hybrid powertrain were optimized based on the designed control strategy and several different typical driving cycles. Finally, the AETEG model was established and embedded into the ADVISOR model of the ISG mild hybrid powertrain system, and both the dynamic property and fuel economy were analyzed. Simulation results under the Economic Commission for Europe plus extra-urban driving cycle (CYC_ECE_EUDC_LOW), Urban Dynamometer Driving Schedule, and the modified highway fuel economy test driving cycle demonstrate that, compared with the prototype vehicle, the dynamic property of the ISG mild hybrid powertrain system based on the AETEG is improved markedly, the fuel consumption is reduced by about 25%, and the battery charge is maintained between 75% and 51%. Road test experimental results also indicate that the maximum output power of the optimized AETEG is about 610 W, the maximum backpressure is below 1.8 kPa when the highest vehicle speed is 125 km/h. Parameter matching and optimization shows the promising potential of this type of AETEG for use in the ISG mild hybrid powertrain system.