It is possible for departed pets to visit their owners in dreams. The ADC (association for after death communication/contact) is studying the phenomenon of such interaction often during dreaming. Usually the departed loved ones both animals and people are being observed to be healthy and energetic rather than ill or old. One explanation for the dream is that this is such a contact because of the strong emotional bond that you have with one another. The presence of other pets in the dream is to reassure you that life even without a physical body is still existing and is eventful and joyous (connecting with other furry friends). The olfactory experience may be another validation that this is a "true dream" versus a byproduct of the sleeping brain.
Another explanation for these sort of dreams may be due to unresolved bereavement as you can still be grieving and miss your pet regardless of when they departed. Repetitive dreams usually manifest to grab the dreamer's attention as well as to urge on to resolve issues that the dreamer may be struggling with.
Animals and the Afterlife: True Stories of Our Best Friends' Journey Beyond Death by Kim Sheridan (Paperback)