Dexter Neal was mauled by an American Bulldog at a house in Halstead, Essex, on Thursday.
He was airlifted to Addenbrooke’s Hospital in Cambridge, but later died.
A 29-year-old woman has been arrested for allowing a dog to be dangerously out of control and injure a person, Essex Police said.
The dog has been seized by officers and placed in kennels.
Dexter was attacked at an address in Parker Way in the town, and a police cordon has been placed around the semi-detached property.
Shirley Diver, the mayor of Halstead Town Council, said of the little boy’s death: “It is an absolute tragedy, the whole town will be completely shocked and devastated by this.
“It is such a terrible thing to happen anywhere, you just don’t expect it to happen in your town. We are a close-knit community, everybody knows everybody.”
Mother-of-five Lisa Smith, 43, who lives in Parker Way, said the family who lived at the address behind the police cordon “kept themselves to themselves” and had not been in the street as long as her other neighbours.
“They’re very private people, to be fair,” she said. “It’s just terrible. I just feel so sorry for them.”
A spokesman for Essex Police said: “The boy, who is aged three, was taken to hospital, where he sadly died from his injuries.”
The young boy’s death comes just days after a 52-year-old man was attacked and killed by a dog which had been returned to its owner despite concerns that it was dangerous. David Ellam was out walking his Yorkshire terrier close to his home in Huddersfield on Monday when he was attacked by another dog. He later died in hospital.
West Yorkshire Police said the animal concerned had been seized by police following a visit by a dog warden in June, but had been returned to its owner on 8 August after it was determined that it was not a banned breed.