The penguins were discovered Wednesday along with two dead water rats. The Department of Sustainability and Environment is investigating the deaths, Australian officials said.
Dr. Hugh Wirth, president of the Royal Society for the Protection of Animals, says the discovery is a threat to Phillip Island's penguin population.
"It's now at risk," he told Australian Broadcasting Corp. "Because one of the features of dog attacks on livestock and other animals is once dogs learn to kill, they keep returning."
If the owner of the dog responsible for the attack is found, they will face a fine of up to $3,000 because both the penguins and the water rats are protected in Victoria.