Grace Saenz-Lopez, the former mayor of Alice, had claimed Puddles died last year while she was pet-sitting for the neighbors.
Three months later, however, a relative of the neighbors saw the dog, renamed Panchito, at a grooming business.
Saenz-Lopez insisted that Rudy Gutierrez and Shelly Cavazos had neglected the animal, but District Judge Richard Terrell in McAllen ordered her to give the dog back to the couple.
"She's broken-hearted, man," said Homero Canales, Saenz-Lopez's attorney, but he added that his client would comply with the order.
Canales added that the judge "admonished us for making a big deal out of a dog case." The lawyer's wife delivered the contested pooch Thursday afternoon.
"I think everybody is just delighted," said Dee Ann Torres, the owners' attorney.
The case gained national attention, including on NBC's "Today" show, on which Saenz-Lopez said in February, "I didn't steal the dog. I did not return him to save his life."
Saenz-Lopez resigned as mayor that month once a recall petition began circulating. She had held the office since 2003.
Torres said Gutierrez and Cavazos cared for the dog as well as Saenz-Lopez did.
"She is in no way a humanitarian in taking this pet away from its owners," Torres said. "They love that little dog."
Saenz-Lopez still faces two felony counts of tampering with evidence and concealing evidence. A preliminary hearing on those charges is scheduled for Tuesday.
