A responsible dog owner needs to set boundaries for their dog. When you have a possessive dog that is aggressive, it can turn other dogs into being aggressive as well. Aggressive behavior signals an insecure dog. Small dogs can have insecurity issues.
If you have a small dog who tries to bite people who come near you, do not coddle your dog. When you coddle him, you are teaching him that he has won. If he you have him in your lap and he tries to bite someone who comes near you, quickly make a noise such as “uh-oh” and set him on the floor. Keep doing this every time he is aggressive. When he does not try to bite, praise him and give him a treat.