The Staffordshire bull terrier was restrained by a parent after biting the children in Blyth, Northumberland.
Three of the children, who all suffered bite wounds as they were trapped in the park, were kept in hospital overnight after the attack, which happened yesterday.
Police later arrested a 37-year-old woman on suspicion of having a dog dangerously out of control.
Among the injured, a seven-year-old girl was expected to need skin grafts, the BBC reported.
Adam Mulvey, who lives next to the park, said: "I got a knock on the door from a little girl telling us that there were several children trapped in the park with the dog, and one of them was my little girl.
"I could see her from the house and everyone else screaming, howling, it was just horrific."
Mulvey said he ran outside, saw the dog and sat on it, before tying it to the fence.
"My daughter's seven and she's got to have an operation now. They're looking at the possibility of having to have skin grafts.
"She's frightened of dogs now for the rest of her life and frightened of parks."
Fiona Richards, who lives opposite the park, said: "The dog was running around super fast biting every kid in there, I saw it grab a little one by the shoulder. It was bedlam."
Another resident, Neil Wilkinson, said: "There were about 30 kids in there and the dog just arrived from nowhere.
"I got in and started lifting them up and out of the park. As I was doing it the dog leapt up and bit my son on the arm."
A spokeswoman for Northumbria Police said officers remained in the area to reassure people.
A pet owner convicted of dangerous dogs offences will face harsher punishments, including a jail term of up to 14 years, under new sentencing guidelines in England and Wales that will come into force from July.
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