Strange Companion (1961)

Hashimoto tells his children a bedtime story about a young mouse who adopted a small dragon as a pet. No one knew how big a dragon could grow until the young boy suddenly has a a 40-foot dragon! When the pet dragon destroys the boy's town, it's time to say goodbye. he dragon is banished from the village. However, there's a big problem about to explode on all the townspeople... a problem a dragon could fix- if only he was there. There's good news when the big dragon gets to the top of a volcano to spray it with water and save the countrieside.