Erwitt’s image is constructed with the strong use of vertical lines, drawing the viewers eye down through the frame, eventually resting on the small dog. The lines add emphasis to the size of the dog enabling the image with comical sensibilities. Its height, or lack of, is accentuated when compared to the legs of the woman and dog standing next to it and the hat sandwiched between two oversized ears gives further credence to the images comedic value. To give further emphasis, you only need to look at the size of its legs in comparison to the small dogs legs beside it. The framing and cropping and use of space around the figures creates the emphasis in size differentials and so enables us to have a little chuckle at the small dog.
Regarding as to what the image is saying, I look at further information within the image and text. I can see that the image was made in New York and surmise through the background setting that it could perhaps have been shot in Central Park. I already know the area surrounding Central Park contains some very exclusive properties and hotels, not dissimilar to Hyde Park in London and looking at the fashionable (for the time) boots and woollen coat can further conclude that the person is obviously concerned with their appearance and perhaps also concerned with showing their self-appointed status within New York society. To further accentuate this are the dogs themselves; one being of the toy dog variety, to be fussed and petted excessively, a lap dog if you will, the other looks as if it may be a Great Dane, a form of guard dog, protector of wealth and an emblem of status associated with wealth. So, for me Erwitt is letting me see comedy not only in the size and character of the small dog but also on a social level, I am as much laughing at the absurdities of supposed social standing and status through accumulation of objects meaning to signify wealth.