Melee can proc Predator. Besides weapon range, the primary factor I've found preventing this from working properly is clear vision. Smoke (and steam?) seems to be the main issue that prevents this from working correctly in my experience. There are also some issues inherent to the base game that cause general targeting to not work as expected, such as inconsistent variances on the Z-axis as well as the occasional object or environmental structure that unexpectedly blocks vision. Last thought here is to make sure your melee has enough Predator charges. Also, for anyone who is not aware, Predator does not proc on your turn, so another character will have to trigger it.