I have researched much about dogs of the era. Specifically hunting dogs.
http://en.wikipedia.org/wiki/Medieval_hunting#The_hound
Four main breed of hunting for the era
greyhound.
http://en.wikipedia.org/wiki/Greyhound
alaunt(mastiff )
http://en.wikipedia.org/wiki/Caucasian_Shepherd_Dog
running-hound (foxhound)
http://en.wikipedia.org/wiki/Foxhound
lymer (Blood hound)
http://en.wikipedia.org/wiki/Bloodhound
I propose they be kept inside the stable along side of the horse. That they are randomly obtained, and the knight who finds one can either sell it like a horse on the open market, or claim it and train it. Training increases at random percentages, and when full the dog can hunt. Random catches are obtained in each hunt equal to the value of a fish or a stock item. As well the dog can offer an individual knight a 5% increase in attacking in an army battle. Not in a duel, or street brawl.
I further propose that the dog have moral that goes up and down by 2% a day. That the knight can daily pet the dog, bath the dog, let play with other dogs, and play with the dog to raise the moral. Moral will effect likelihood of any hunt, and reduces the effect in an army battle.
I propose it cost 5 wood to claim and keep the dog. The age range of the dog should be 100- 160. At the end of the animals age they can be terminated by the knight, and the meat of the dog utilized as stock amount. For those players who are more squeamish they can just let it rot away and disappear.
I believe this would add a new dimension to KH. More interactivity, and further interest. I believe such a proposal would be beneficial to the game as a whole. Should fit mostly into already established coding.