Well it's not surprising you worry about her - especially after what happened to your cat. I'm so sorry to hear that happened, it's truly awful.
It's understandable that you'll worth more if your dog is small. I think maybe you could do a few things though to make yourself feel better.
Firstly you could work on her reactions to other dogs. It's completely understandable that she goes back at other dogs who have a go at her first (one of mine does the same
) but teaching her to redirect to you instead (focus on you for treat, fuss, toy, praise, whatever) could stop a situation escalating and help you both feel calmer. There's a game called Look At That I'm sure you can find online. Essentially you train the dog over time to see a dog and to turn to you for direction. If it's one of her friends - great, she can be released to say hi. If it's not, you can get out of the situation and away from the dog with less fuss. This method is used for reactive dogs and frustrated greeters which yours doesn't fit exactly but might help you both?
Secondly, you could teach "middle" where the dog stands between your legs. Practice at home and then practice out and about. Lots of people use this to help their dog feel a bit more secure in a situation where a rude dog is in their space. Might be worth a try? If a ride dog approached it might give you change to cue your dog between your legs and then move away.
Thirdly, people love to say you shouldn't pick up small dogs if another dog is in their space as it "makes it worse". I call bullshit on that. It's a very big, scary world for small dogs and they (any dog actually) need to feel like you are their protector and you can get them out of a situation. So if you need to, scoop her up, throw some treats away to distract the rude dog and walk away with your dog. If she's always on a lead though.
Do you think teaching her not to go back at other dogs, teaching her a nice cue that means you have got her close and she feels safe, and knowing that worst case scenario you could distract a dog with treats, scoop up your dog and move away, might be a good start to helping you feel more on control and less anxious about dog walks?