Problems with btw our current dog and new puppy

Question
Hi,
So nearly a year ago we rescued an exceedingly sweet and docile stray. She (from what the vet can tell) is a 3&1/2 year old Border Collie/Husky/Shepard mix(Ruby). It is estimated that she has had as many litters as years alive. When we found her she was in rough shape, sweet, but hand shy, underweight, just had puppies and was a bit patchy and missing a lot of teeth. It took a lot of TLC and $$$ but shes now spayed, heartworm and parasite free and has a beautiful coat.
  We wanted to help socialize her so we got another dog (about a month and a half ago(Zelda). Now I know Ruby was used to being the main focus of our attention, and I think we have come to balance it well. Their first meeting did not go well, Ruby bit Zelda in the face and broke skin (with the only kind of dumb luck that befalls US being that shes only got about 4 sharp teeth in her whole head). But ever since Ruby has become extremely submissive to the new puppy (the puppy is a wheaten terrier and is only about a 1/4 of her weight). Or she just flat out ignores her, untill Zelda puts her face in Ruby's face...then Ruby will get up and hide behind either my GF or myself, or if we're on the couch she will bury her face under a pillow or actually wedge it behind one of us.

  Whats the deal with that? and how can we get Ruby to assert any kind of dominance over Zelda being that shes the bigger dog and has been here longer? Zelda just jumps all over her and bites her and Ruby could care less....

Answer
It really wasn't a good idea to introduce another dog.  Ruby has had a terrible life.  One doesn't get another dog to 'socialize' the first one.  Unfortunately your choice of breed wasn't the best, either. Wheaten Terriers are dominant, tough little dogs and are often the result of very bad backyard or puppy mill breeding, contributing aggression to the mix (plus various genetic problems.)

How you responded to Ruby's first fear reaction to Zelda may very well have doomed any attempt she might have made to put Zelda in her place.  If you responded with any negativity whatever, Ruby (who appears to have a very soft temperament along with who knows what horrors befell her at the hands of the miscreant human who once "owned" her) has now permanently set aside any and all reactions except flight.

You need to put Zelda on a house tab (lightweight long nylon leash or training lead) and control her interactions with Ruby.  Do NOT allow her to harass or in any way inflict herself on Ruby.  Pet Ruby first, feed her first, take her out first, etc., in an effort to communicate to Ruby that she is higher ranking.  You also need to make Zelda sleep in the kitchen or any area away from your bedroom, while allowing Ruby to have run of the house.  Zelda will definitely "get" this communication also, and your next problem is seeing to it that Zelda does NOT escalate her (now) quite immature test of rank into outright aggression toward Ruby.  Be sure you introduce positive reinforcement to Zelda and train her vigorously (for very short intervals each day) to obey commands (train one at a time.)  Socialize Zelda by taking her outdoors and introducing her to everything alive and moving.  This breed (like most terriers) requires long, patient and consistent socialization AND positive reinforcement training right up to (at least) 18 months of age.  Have Zelda spayed way before she goes into season in order to short circuit any hormonal contribution to her rapid development of rank over Ruby.  If Ruby continues to suffer despite your efforts, re-homing Zelda is an option (or contact the breeder -- hopefully this isn't a pet store or backyard purchase -- and return her.)