Any ideas for soft "bedding" in an outside kennel?

First off: I hate kennels, and I would never keep a dog in one other than temporarily. This is a special situation:

I work in a dog training centre. I take my young puppy (Wilson) to work with me twice a week. He joins in when we train young or calm dogs, but some are too rambunctious for him right now. When we deal with those, I leash him and he is happy with his toys and Kongs.

However, a couple of the more complicated dogs don’t have a good recall. I stay with Wilson and act as a bodyguard for these, but it’s not a great situation. We have a three-sided-hut which has a wire gate, so Wilson could stay in there. He would still be able to see me, but I wouldn’t need to worry that a dog will get past me and startle him.

Only problem: The wooden boards which act as a floor are broken and splintering in places. We could just replace those, but I’ve been thinking that Wilson would probably love something like straw, to dig around in and make custom-sized beds of…however, I’m guessing that the mice we see occasionally would use that as their new habitat. Would sand work? Any other ideas?