How did Professor Shepherd pick which dogs would be (wolf, fox, etc.)?
Well, it is my guess that these were the first experiments with the transdogmafier. Because of this Shepherd would want to keep everything in a controlled environment so he stuck with dogs. Better to have a rampaging dog than a wolf if something went wrong. Later on, after he perfected the process he could think of doing such. Had their been a season II then we might have seen that.