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French Bulldog Rolo was introduced to the mum-of-five's family earlier this month, but it was reportedly found by Price's son Harvey's carer today at the family's Surrey home.
Her eldest daughter Princess had only recently posted about going on a shopping trip to get treats for the dog.
A representative for Katie Price told LADbible: "Naturally Katie is devastated by the loss."
A source told The Sun: "Rolo was found dead by Harvey's carer and they had to phone Katie to break the news.
"Katie is devastated and heartbroken and had to call Princess and break the news. Everyone's in floods of tears.
"It was a tragic accident nobody could have foreseen - it's no one's fault, but Katie can't stop crying."
Sadly, Katie hasn't had a lot of luck when it comes to pets, with Rolo becoming the fifth of her animals to die within a few years.
She was left upset after another of the family dogs, Alsatian Sparkle, was killed after being run over in February.
Before that, her dog Queenie was hit by a pizza delivery van, as well as the family's chameleon Marvin, who died of a 'broken heart'. One of her beloved horses was also killed after being involved in a road traffic accident.
She now has one pet: her guard dog Blade.
Katie had made sure that Princess could buy all the treats and accessories she wanted for the dog. She was filmed last month splashing out in a pet store, her trolley packed with blankets, bottles and perfumes for the dog.
Princess got the dog for her 13th birthday as a gift from Katie, after her dad Peter Andre turned down his daughter's plea for a puppy.
Writing in his magazine column, he wrote: "It's Princess's birthday at the end of the month and she said she wants a puppy.
"It's every dad's dream to get their daughter a puppy for their 13th birthday but Emily is so allergic to dogs I don't think it's going to be possible.
"It makes me sad I can't make Princess's dream come true but I will make it up to her, I promise."
Peter got her two dwarf rabbits instead.
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