An ensouled dog head is an item which can be dropped by dogs. It is used to gain Prayer experience by using the level 26 Magic spell Reanimate Dog from the Arceuus spellbook. When a player reanimates an ensouled dog head, a reanimated dog will appear and grant 520 Prayer experience after being killed.
The head can be reanimated anywhere across Gielinor only if the spell is cast on the head while it is still on the ground. Once the head has been picked up, it must be taken to the Dark Altar in Arceuus to be reanimated.
For an exhaustive list of all known sources for this item, see here