Penny the Cavalier King Charles Spaniel was taken by a man who pretended to be her owner after she escaped from her home in Brownhills on December 23.
Appeals to track her down were shared tens of thousands of times online, with people across the country keeping their eyes peeled for the spaniel.
And three weeks after disappearing Penny is now back with 77-year-old owner Alan Chamberlain after being found sodden but safe not far from home on Monday evening.
Mr Chamberlain said he was delighted to have Penny back in his arms, adding: "I burst out crying, I'm just in a dream.
"I'm just on cloud nine. When I heard the news that someone had seen her I said I don't want to get my hopes up, I better get a photo and check and I did.
"She'd been spotted running down the road, she was out in the rain and was so muddy."
Penny was spotted at around 10pm on Monday evening on a lane close to the A5 by Stacey Bushell, who was returning home from work.
Ms Bushell was unaware of the interest in finding Penny and went to a local vets to see if she was chipped and could find the owners - only to then find out the missing spaniel had become a minor celebrity.
"I didn't expect on a late journey home from work to be going two miles an hour down a main country road due to a soaking wet dog running in the middle of it," Ms Bushell said.
"Like anyone I stopped the car and got out but Penny is pretty fast especially when I'm in heels so I got back in my car to follow her again, at this there was a guy who pulled his car in front of her and I pulled mine behind her. We both found her.
"I just took her and wanted to find her owner, next step being a local vets not having a clue she's pretty famous for being lost. Like anyone would...I just handed her back."
The Dog TAG page, which helped publicise the appeal to track Penny down, described her return as "the most amazing news".
Penny had found by a local carer shortly after slipping out of her home in Bradford Road on the afternoon of December 23 but was then taken by a man who lied and said the dog belonged to him.
The man, who was with a young child in a car thought to be a red VW Golf, drove off with Penny after the carer handed her over.