A little sister huh? What are you waiting for? ;)
The answer to me depends on whether she's old enough to know that her expectations aren't realistic or not. If she is then I'd simply say that those aren't things that Santa is likely to be able to do and she might want to think about other things she might like to put on the list. I'd expect her to think of other things then.
If she's at the age where she thinks a little sister really is something Santa might bring I'd have a talk about how Santa can't bring everything, and list what he can bring (toys, books, games, etc). Maybe tell her that Santa and his elves make things in big factories, so he can only bring what he and his elves can build, and that babies and dogs aren't built. Lead that into talking about where human and dog babies come from and that it's up to the parents to decide when to have baby brother or sister.
Mention that Santa could bring her a doll instead, but don't ask if she would like one. Just mention the possibilities of what Santa can bring, then let that sink in and in a day or two before asking if she wants to add a doll or anything else to the list. If you ask right away you're more likely to get a knee-jerk "NO!" answer.