See? Shoulder dragon.
If you are into details, you probably noticed that Smidgeon looks a bit different between the two drawings. I'm still kicking around exactly what he looks like (Should the spikes go all the way to the end of the tail? Or should it be prehensile?) but I've made some progress in fleshing out the world he lives in.
The text on the reference illustration mentions Common and Noble Dragons. So far, my concept is this: In generic sword and sorcery pre-industrial world X, small dragons are common pets of the elite. (There are other things they keep as pets too... I have a basilisk illustration I'll show you another time.) These dragons are both status symbols and hunting animals, similar to hawks. Although they have to work a small magic in order to fly, that's the limit of their magical skills. These Common Dragons are really just animals, about as smart as a very smart dog.
In X, there's a history of dragon lore and literature that is assumed to be mythological. Stories mention small dragons that could talk, and would intercede with the big dragons on the humans behalf. These little dragons were called Nobles, and the big dragons (your good old proper knight-roasting kind) were called Royals.
At the time my story is set, nobody's seen or heard of a Noble or Royal in a few hundred years. (dun dun DUUUN!) Royals of course, are on the horizon. (I'm thinking a broken treaty...broken when humans forgot about it, 'cause they have this pesky habit of dying every eighty years or so. That makes for a much shorter institutional memory than dragons have. Funny enough, none of the dragons thought of that when the treaty was made in the first place.) It turns out that Noble Dragons are quite alive and well thank you: masquerading as Commons. There are actually small physical differences, but since humans have been breeding Commons selectively for a few generations, domesticated Commons look more like Nobles. My idea is centered on Smidgeon: a moderately valuable hunting Dragon owned my an up-and-coming human aristocrat. Smidgeon of course, is a Noble, and the story begins when a human realizes that.
But this is all background. Maybe later I'll have some actual plot.