OK - Easy to pleasy.
So what your thinking then says is this.

If doing the time record thing suggests Dog 1 is .5 seconds better than Dog 2,and Dog 1 ran over a longer distance than Dog 2,Then in fact Dog 1 is actually more than .5 seconds better than Dog 2.
Conversely,if Dog 1 ran over a shorter distance than Dog 2 it is in fact less than .5 seconds better than Dog 2.
No?

Do this.
You multiply the above .5 seconds by the distance Dog 1 ran over and then divide it by the distance Dog 2 ran over.

Still not guaranteed to be the definitive solution,but certainly allows for your concerns in a positive direction.And very simple to apply.
And I tell you what.There are a lot more important factors governing the result of a race.
Not easy to do but judging what will happen at the start is very crucial.