OK, I'll just say outright, this post is about the book the film's based on, NOT the movie itself.
I've heard it said that in the novel there's the suggestion that Cujo is possessed by the ghost of Frank Dodd (a serial killer from a previous Stephen King book, THE DEAD ZONE). I read the book myself, and although Frank does get mentioned a couple of times, I never got any sense of that. To me the dog in the book (as well as in the movie) was merely rabid, nothing more.
I wonder if Tad Trenton was a reincarnation of Frank Dodd. It seemed like he was a figment of his psyche the whole time and that he even psychically projected it upon Cujo. There is a strange reference to a slick yellow raincoat in Tad's bedroom near the end of the book, and if you've read The Dead Zone, know is Frank Dodd's trademark.
I wonder if Frank Dodd's evil soul will ever be revisited in a future novel.
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This is probably my favorite Stephen King book, so I've read it more times than I can count. And I agree that Cujo doesn't seem to be possessed by the soul of Frank Dodd. The impression I've always gotten is that a sense of evil seems to lurk beneath the surface in Castle Rock, and every now and then, it emerges in various forms. If you've read some of King's other books, it seems that Castle Rock has had more than its fair share of tragedies. I think Frank Dodd and Cujo are both treated by King as reincarnations of that underlying evil.
In one scene in the book, Sheriff Bannerman grabs Cujo and has a split second to look at him just before he is attacked. In that moment, he recognizes Frank Dodd in Cujo. But I don't think that's because Cujo was possessed by Dodd. It was that Bannerman recognize that underlying evil emerging again, and the only other representation of it he had experience with was Frank Dodd. So Frank Dodd is the only name he could put to his recognition.
Okay - admittedly I do not have a copy of "Cujo" on hand to reference pages, but I too have read the book multiple times, as it's one of my favorite Stephen King books, and I could swear that Frank Dodd was referenced in the early scenes of the book when Tad's closet door kept mysteriously swinging open. I remember reading the book for the first time at age 10, and being so young I didn't quite 'get' everything. But I do remember the reference to the spirit of Frank Dodd being the 'presence' in the closet - I remember it specifically, because at 10 I hadn't read "The Dead Zone" yet, so I was totally perplexed as to who the hell Frank Dodd was.
As for Cujo being possessed by Frank Dodd, I am not sure. The book seemed (to me) to imply that there was something sinister at play in his attacks/fatal maulings besides being in the final stages of rabies - something that at least several of the victims felt. I do recall Sheriff Bannerman's sudden recognition of Dodd in Cujo before he was killed but I was never clear as to whether the book meant that it was in fact the spirit of Frank Dodd or merely that same sort of evil. I also recall Donna's feeling that Cujo was out to get her personally (in addition to the rabies driving him to want to attack them) but I don't remember if S.K. made any reference to Frank Dodd as far as Donna. The fact that Cujo was able to continue attacking even after being severely wounded as well as near death was the only thing that made me think that maybe Frank Dodd did have a hand in Cujo's killing spree.
So...I'm thinking S.K. decided to leave it to the interpretation of the reader to decide whether Frank Dodd's evil spirit was inhabiting Cujo or not. That being said, I still don't know what I think! :)
I felt the author just included some suggestions about the supernatural / evil, to make up for the lack of it in the main track, and add some spice to the mix... Theres no supernatural play here, the lovable dog is bitten by a bat and he turns rabid. Thats all. But repeatedly, King keeps teasing the reader by making Cujo look like a dog possessed by an evil soul.
1) When Tad is lying on his bed, staring at the "monster", the monster menacingly introduces himself as Frank Dodd. Tad himself finds something very familiar about the creature in the closet, but he cant put his finger on it. Donna is also creeped out by the closet. The smell in the closet is described as heavy, unpleasant, savage etc..
Towards the end of the book, Vic closes the closet door and watches wide-eyed "as the latch lifted and popped free of its notch. The door began to swing again ".
2) When the cop, Bannerman is attacked by Cujo, he looks at the dog and thinks "Hello, Frank. Its you, isn't it? Was it too hot for you in hell.?".
I think, King is definitely implying that Tad's house is haunted with Frank's ghost. But, I see absolutely no connection between Cujo and the haunting. I would have preferred it if the closet-monster was merely a figment of the little boy's imagination.
All in all, I found the book quite effective. I was more horrified by the bat-cave, the plight of the poor rabbit, the suffering out-of-control dog, Brett's loneliness, his mom's helplessness etc.. than the stupid red-eyed monster.