The only way to fix the trampled grass is to loosen up that packed area by tilling and/or spading the area and adding some compost or fresh soil. Then you can reseed. Unless you keep your dog off the area, though, he’ll pack it down again quickly. Perhaps you could keep an area close to the doghouse mulched with bark or pine needles instead of trying to grow a lawn there. If you have a dog loose in your yard, yellow spots will occur. To prevent the yellow spots, flush the area with water each time the dog goes to the bathroom. The water dilutes the concentration of uric acid found in urine, preventing ammonia buildup in the soil.