|Matt Martyniuk/University of Portsmouth|
Being the smallest dinosaur is like being the biggest Chihuahua: it goes against the point of the thing. Of course, "smallest dinosaur" is always a qualified designation; "of which we know" is the unstated qualifier. The present holder of the title is the "Ashdown Maniraptoran," from the early Cretaceous of southern England, thought to have been about thirteen to sixteen inches in length and, according to the restoration shown above, to have looked something like a partridge in search of a pear tree. This restoration is based on one fossil cervical vertebra found by amateur fossil hunter Dave Brockhurst, who kept it in a drawer for about two years before sending it to University of Portsmouth paleontologists Darren Naish and Steve Sweetman, who identified it as coming from a very small adult dinosaur of the clade Maniraptora
(also the title of a friend's excellent website
You may quite reasonably wonder how this restoration could be made based on a single vertebra. Matt Martyniuk, the artist who made it, owns that it is "entirely speculative" but explains his methodology in this post
and defends it in the discussion thread following.