my sister, who was five at the time, saw this movie and didn't seem upset at all about the crazy dog. in fact, she laughed most of the time and immediately realized it was a stuffed animal.
i could understand if a kid already was petrified of small dogs, but if they were, then wouldn't they demand NOT to see the movie? plus, Disney channel puts out an original movie EVERY MONTH, ALL YEAR. a movie a month is no easy task for this small Disney department, let alone a huge industry pumping out theater worthy movies. these Disney channel original movies (DCOM's) are low budget and rushed because Disney just likes the idea of having a new movie a month with a child-friendly message for kids to watch.
a parent should be appreciative of Disney channel. it's a great balance between the nickelodeon shows that seem to skip from toddlers with nickjr. straight to the tweens. the shows nick has for the ages in between are suitable and clean, but never have a message. they seem just fine entertaining kids by having cartoons picking noses and being ridiculous.
hounded has a great message. and it's free to watch. so just chill out and know your kids are gaining good perspectives and morals.