Layla was also terrified of other dogs, and a trainer suggested I put her in a puppy class since puppies are pretty social and she was still small enough at 2 years that she wouldn't intimidating. Anyways, the first day the puppies tried chasing her and she hid under the table for 20 minutes, pressed against the wall. By the last class, she was running with them! It worked wonders. I had to learn to not baby her when she came running to me scared. She had to learn "I'm here, there's other dogs around, and there's no way to get out of it" and I think by the end she was actually looking forward to seeing her same puppy friends every week. I guess the bottom line is socialize socialize socialize. Even if they hate it, they'll hopefully come around eventually
I think it's important for dogs to have canine companionship as well as human.