Although the dog isn't exactly much larger than the cat, it has allowed it to climb on top of its body and sleep on it. Much like a mother locks her children in her loving embrace, which allows them to sleep once they come in physical contact with it. These two share the same bond, the pooch there is much younger than the cat, but overtime as it grew in size, it began to realize that the cat has a lot to offer in the way of experiences.
This experience could be used to the benefit of the dog's own growth as a pet. What harm could the cat do to it? What's the worse that could happen? The cat ends up passing stool? Puking on the dog's fur? The dog probably won't care given how it regularly sniffs its own fanny.