The real-life animal, and that in the 1955 film, had a notoriously offensive name - which was also used as a codeword in key scenes of the film.
But Fry - who is writing the screenplay - said the dog would no longer be called the "n-word" but is likely to be called "Digger".
The movie tells the story of the bouncing bomb created by Barnes Wallis during the Second World War to demolish German dams. The dog, owned by Wing Commander Guy Gibson, was the mascot for RAF 617 squadron, which carried out the raids.
Fry said it would be unacceptable for audiences if they stuck with the original.
"I think there is no question in America that you could ever have a dog called the n-word," he said. "It is no good saying it was the Latin for black and it didn't have the meaning that it has now, you just can't go back. You can go to RAF Scampton and see his grave and there he is with his name."
Fry pointed out that the dog's role was an "important part" of the film, not only because it was run over before the first raid which was seen as a bad omen, but the name figured in the plot. In an interview with Simon Mayo and Mark Kermode for Radio 5 Live, he said: "The name of the dog was a code word to show that the Merner dam had been successfully breached."