How long have they lived there? When is the lease up? Are they a good tenant otherwise? Do they keep the place clean? What kind of dog is it? Does you insurance cover tenant's dogs and that breed in particular? If they have been good long-term (I'd say at least a year) tenants and you're amenable to them keeping the dog, write them a letter stating that you are aware that they have broken the lease. As a result, ..their rent will be raised (technically, since the lease is broken, ; additional security deposit; must provide proof of renter's insurance, inclusive of coverage of the dog (bites, etc.); must provide documentation of license and rabies shots; must sign a lease addendum covering all this; any other breach of the lease without your prior written approval will be cause for immediate eviction. If you do not want them to keep the dog, give the a cure or quit notice. Then prepare to file for eviction per your state laws. Either way, be prepared for them to allege all sorts of violations by you. Common reaction of tenants in the wrong. If you do nothing, that will be considered acquiescence to the dog and the tenants will think they can anything they want.
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