http://www.minecraftwiki.net/wiki/Wolf#Health_and_feeding"A wolf's tail will rise and lower depending on its health. The exact health of an individual wolf can be determined by measuring the angle between its hind legs and tail. The angle indicates the percentage of health the wolf has (100 degrees for 100%, or 10 hearts; 90 degrees for 90%, etc.). Health can be restored by right-clicking a wolf with any type of meat. Rotten flesh will not induce the "hunger" potion effect (Food poisoning) on a wolf.
Splash potions of healing or regeneration can be thrown at wolves to heal them.
Since wild wolves have a maximum health of 4 hearts, their tails will always remain significantly lower than those of tamed wolves, which gain 100% health (10 hearts) instantly upon being successfully tamed. Puppies will not gain 100% health when born. They must be fed in order to achieve max health. All the meat has not the same effect on a tamed wolf health. For example, to get a perfectly healthy puppy, you should give him 6 raw chicken or 5 raw pork or 4 raw beef or 3 zombie flesh or 2 of any cooked meat."