I shall be watching with interest, as I have the same problem with dd, who is almost 6. While a healthy respect for dogs is no bad thing, it's a bit ridiculous when she starts flapping because the smallest dog on the planet comes within six feet of her!
It's a fairly recent development, she has never really been frightened of them before - it's almost as if she's suddenly worked out that dogs could hurt her, and so she gets panicky whenever any dog is around.
I have been trying to tell her about different types of dogs, and some of the things that they do - guide dogs, hearing dogs, police dogs - to try and get her to see that not all dogs are dangerous, which seems to help a bit until the next time someone lets their dog come bounding over and she freaks again.
We are trying to teach her to stay still and not shout whenever there are dogs around, as that will only attract them and make things worse, but she finds it hard to do when she feels so panicky.
Sorry, that was of no use to you at all! Hopefully someone else will be along soon and we can both get some advice!