history: I have a stuffed animal that my old dog used to lay by.  He's dead now but I still keep that stuffed animal in my room.
current: I have a stuffed animal that my old dog used to lay by/on as a pillow. My dog is dead but I still keep that stuffed animal to remind me of him
next: I am sorry your dog passed away, I totally understand wanting to keep a momento to remind you of him. Was he old when he passed?