As interesting as it would be to have a dog that talks (like we see on TV shows and movies), I think there’s something to having the undivided attention (at times) of a dog whose response to our presence is marked by an array of body movements and a bark, or howl/grunt/whine in our case. No lip service. Mostly ears.
Instead of the talking dog, I would take the thought bubble dog. The thought bubble dog would have ‘a thought bubble’ over his/her head whenever something occurred to him. During sleep, while eating, playing with other dogs, shredding yard items, staring at you, farting. At any of these times I would have insight into a dogs comical yet cynical-at-times mind. There would be no doubt as to why she’s doing the things she does – it would be legible about a foot over her head.