* A young animal: This is the most likely meaning if you're talking about a litter. For example, a "small animal" in a litter of puppies would be a puppy.
* A small breed of animal: This is also possible, especially if you're comparing animals within the same litter. For example, a chihuahua could be considered a "small animal" compared to a Great Dane in a litter of puppies.
* An animal that is physically smaller: This is possible if you're talking about a mixed litter of animals of different sizes. For example, a rabbit could be considered a "small animal" compared to a larger dog in a mixed litter.
To get a more accurate answer, please provide more context! What kind of litter are you talking about? Are you comparing sizes within the litter?