The alsatian, Fram, was trapped on a narrow ledge about halfway down the cliff above the water-filled quarry.
A technical rescue team from Leicester's Meridian fire station was called to rescue the dog. They lowered the dog's handler down and hoisted both back up.
The incident happened at Granite Quarry, between Sapcote and Stoney Stanton, at noon yesterday.
Police had been called to Grace Road, Sapcote, at 11.07am by the ambulance service after a report of a domestic assault.
Officers from the dog unit attending searched for the suspect who had run off.
A police spokesman said: "While searching, Fram slipped and fell into the quarry.
"The dog has been checked by a vet and was not injured.
"A man was arrested in connection with the assault and remains in police custody." Crew manager "Polly" Cotton was in charge of the rescue. He said: "When we got there, the dog was about 18 or 20 metres down, trapped on a ledge.
"It was getting tired and it was cold, confused and anxious but the handler was there and kept talking to it to keep it calm.
"With it being a police dog and a police handler, I made the decision to put the harness on the dog handler and lower him down to retrieve the dog, rather than one of my crew, who might have got bitten.
"The dog was fairly uncomfortable on the ledge and could have slipped at any time." Mr Cotton added: "Once at the top, the dog was licking everybody and the police officer thanked us all."
