I've got a treeing walker coonhound that initially was WAY too interested in my chickens - staring intently, ears up, tail wagging slowly, generally "excited with intent" posture (which is a lot for him, haha). He wasn't allowed direct access to the chickens until we broke him of his excited interest. I'd recommend standing out there with your dog, and as soon as he looks at the chickens, break his focus. Nudge him, make noises like "tssh tssh!" and tell him no. If he goes after them, pull him off the chicken, and tell him "No!" Then separate him from the chickens - kennel, house, where ever he can't get to them. Basically, let him know that chicken mouthing will NOT be tolerated, and is NOT what he is supposed to do. Blue heelers are smart, and should learn pretty quick.
If that fails, I'd see if you can borrow a shock-correction collar from a friend, or purchase one yourself. Try to break the dog out of its intent on the chicken with nudging and corrective noises like before, but if he actually GOES AFTER a chicken, correct him with a mild zap. After a couple of failed chicken mauling attempts, he should be done. Hope this helps!