I have a Chihuahua, and sometimes she's mean around little kids too. Usually smaller dogs are territorial, overprotective, or overly concerned with their space. If the dog is showing its teeth (it probably also tenses up), that means it is preparing to defend itself.
After your dog gets used to the kid, it should be more friendly and whatnot. The dog just has to start thinking of him as part of the "pack."
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