Roger Wilday, 68, was walking nine-year-old Jade in a Birmingham park when the animal suddenly raced to the bushes. Wilday said the dog lay down next to what looked like a discarded carrier bag and refused to return to him.
He said that as he moved closer, he saw the bag move and at first thought it was a bag of kittens but then saw the infant's tiny arms and head, before she began to cry.
Wilday ran to a friend's house and rang 999 and then, on instructions from the police, raced back to pick up the baby before officers arrived.
The baby, who weighs about six pounds, is being cared for in hospital in Birmingham.