While I hate it when people encourage their dogs to kill other animals, I still don't think the owner should be prosecuted. The raccoon is a pest animal and dogs are often employed to control pests. I thought the comment about "mice not being controlled" when they asked about cats hunting mice was a weak argument.
For me, I would be more worried about the dog getting rabies than the health of the raccoon.
For me, I would be more worried about the dog getting rabies than the health of the raccoon.