The Staffordshire Bull Terrier was seized by police after the ferocious attack in Warbreck Drive at around 11.40am, near the junction with Red Bank Road.
The dog reportedly escaped from a nearby home and pounced on the dachshund before biting two women who bravely intervened to try and protect it.
One of the women was taken to Royal Preston Hospital and will require surgery.
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Her daughter said: “It was a traumatic state of events for all. She has severe injuries to her hands and is currently being cared for at Royal Preston Hospital, but is in good spirits.
"She is being admitted to RPH and will be having surgery tonight or tomorrow.”
The dachshund, Daphne, was taken to the vets in a critical condition and underwent emergency surgery to save her life. She is expected to undergo further surgery today.
The daughter of Daphe’s owner said: “It was my mum's dog, she's badly injured. They had to revive her when she first came in.
"She was in surgery for many hours due to her skin and nerve endings being torn from her neck. She's also injured her back and will need to go back for more surgery tomorrow.”
The Staffie was captured and taken away from the scene in the back of a police van. The dog remains with Lancashire Police and an investigation into the attack is ongoing.