You may use either word. I googled "dog is faithful," and found 23,400 links. I then googled "dog is loyal," and found 40,000 links. Then I googled "a faithful dog," and found 120,000 links. Lastly, I googled "a loyal dog," and found 117,000. In my own experience, I have often heard and read both words used to describe a dog. And there is this joke: A woman in court tells the judge that she wants a divorce, because her husband treats her like a dog. The judge asks her, "How does your husband treat you like a dog? Does he abuse you? Does he hit you?" And the woman replies, "No, your Honor. He wants me to be faithful."