Dog in his hut, with spitz's tail wagging (4-3)
I believe the answer is:
shih-tzu
'dog' is the definition.
(Shih-Tzu is an example)
'his hut with spitz's tail wagging' is the wordplay.
'with' is a charade indicator (letters next to each other).
'tail' says to take the final letters.
'wagging' indicates anagramming the letters (letters swing or wag around).
The last letter of 'spitz' is 'z'.
'his'+'hut'+'z'='hishutz'
'hishutz' anagrammed gives 'SHIH-TZU'.
'in' acts as a link.
(Other definitions for shih-tzu that I've seen before include "Dog with short legs and long silky hair" , "Chinese breed of small dog" , "Eastern dog breed" , "Small Chinese dog, like a Pekingese" , "Breed of short dog with long silky hair" .)