Essential oils that have antifungal and wound healing properties can also be good natural dog ringworm remedies. Two oils that are commonly used for ringworm include: Tea Tree Oil: Tea tree oil is a very effective antifungal essential oil, but it can be irritating to some pets, especially small dogs and cats. It is important that we dilute the oil with a carrier oil (such as olive oil) before using on our pets. NEVER use UNDILUTED tea tree oil on dogs and cats.