The woman, giving evidence from behind a screen at London's Southwark Crown Court, said she was working as a waitress at a celebrity event in Cambridge when she was 13 or 14.
She went outside when she and her colleagues heard the animal noises.
"He was on all fours and there was a terrier-type dog in front of him and they were barking at each other," the woman said.
"There was a small semi-circle of people around him laughing and Rolf Harris was playing up to the crowd."
She said she felt "awestruck" at seeing the celebrity, whom she recognised "instantly" when she saw him outside the It's a Celebrity Knockout event in 1975 or 1976.
The woman, who is now 52, told the jury of six men and six women that Harris put his arm around her and moved his hand up and down her back, before squeezing her bottom.
With her voice wavering, she said: "I just stood there. I couldn't believe what was going on, this famous person putting his arm around me.
"To start, it was a very nervous but a good feeling. However, his hand then moved and his hand went up and down my back and his hand went over my bottom and it was very firm."
The woman is named in the second of 12 indecent assault charges that Harris, 84, from Bray in Berkshire, is facing, all of which he denies.
The trial was adjourned until Monday.