We heard about the Sandstone Grillhouse via BringFido.com We brought our dogs with us to Niagara Falls and wanted to be able to sit and dine with our dogs. Dogs aren't allowed in the restaurant of course but certainly allowed on the patio. The waitress even bought bowls of water for our dogs!
Being a tourist town, Niagara Falls has an abundant of chain restaurants. However, there are many independently-owned restaurants that are fantastic! The Sandstone Grill is on Victoria Street, east of the famous Clifton Hill. It's close enough to the main area, but far enough to have a little peace and quiet too.
All dishes are home made and the service was wonderful! Definitely check this place out and bring your pups!