Pick out tulle fabric at a local craft store, or start with a child-sized skirt, and snip away to fit a tiny doggie waist. Cutting (or using) elastic will require more sewing skills but you can instead hot glue a velvety ribbon to the fabric and tie it under the tummy in a bow.
I was surprised by the number of shops selling a pet-sized tutu (who knew?) so, if you're not lil Miss DIY, buy custom-made dog tutus ($21 and up) for all shapes and sizes —it's "cut in underneath for ease in pottying" — but you're both on your own for the toe shoes.
Source: Flickr User Barbara L. Hanson