Researchers at the National Human Genome Research Institute have located genes responsible for small size in dogs.  Humans have been modifying dogs for millennia through selective breeding for an array of traits, including the ability to crawl in small holes searching for vermin.  The researchers claim this will illuminate human disease linked to mutations affecting growth.  From  ENN:

So he began the Georgie project, studying the genes of the Portuguese
water dog, a breed that comes in a wide range of sizes from 25 pounds
to 75 pounds.

Ostrander and colleagues then extended that to a range of large
and small breeds and the researchers located a section of DNA that
varied between large and small breeds in most cases.

Known as a regulatory sequence, the difference is on dog
chromosome 15 next to a previously known gene named IGF1, for
insulin-like growth factor 1. The hormone controlled by the IGF1 gene
helps mammals — including people — grow from birth to adolescence.

In small dog breeds a mutation in the sequence next to the gene kept them from growing larger, the researchers said…

…Overall, 21 researchers studied 3,241 dogs from 143 breeds,
ranging from bichon frise, Chihuahua, Maltese, Pomeranian, toy poodle,
pug and Pekingese to Saint Bernard, Newfoundland, mastiff, Great Dane,
Irish wolfhound and standard poodle.

Dogs are descended from wolves, having been domesticated 12,000
to 15,000 years ago. Selective breeding has produced the many different
types of dogs that exist today.

Judging from ancient artwork, small breeds were developed quite early, Lark said.

A study of several hundred modern wolves didn’t find any with
the small-dog marker, he said, but it is possible there were small
wolves in ancient times.

"If you’re a primitive man you would adopt the small wolf, not
the big one," he said. And for a small wolf, life would have been
easier hanging around people looking for scraps than competing with
larger wolves in the wild.

I think we can assume this will lead to new and exciting breeds as well, like the Great Dachshund or Miniature Irish Wolfhound.