There are a few possibilities of what could be going on. Small dogs are prone to luxating patellas. There could be arthritis or a damaged ligament. I would try Promaxol to reduce the pain and help healing to begin. Promaxol would be a good choice for your dog. It contains the stronger LM potencies. After improvement is seen then you can switch over to Arthro-IonX. In addition, it is helpful to give digestive enzymes with each meal, MSM, probiotics, and fish oil. The oligotherapeutic mineral base found in the IONX products helps the body to better utilize the other nutritional substances given for a synergistic response and faster healing.
Also be sure to give sufficient fresh water that is free of chlorine and fluoride. If you can gradually phase into a grain free diet that can be helpful too. The other thing that is sometimes beneficial is to have a certified veterinary chiropractor check for spinal alignment and make any corrections as necessary. Spinal alignment can even influence how well the knee or hip functions. You can request that your veterinarian x-ray the leg if you you wish to see what you are dealing with.
Please let us know how you progress or if you have any other questions.