I'm going to reach back a bit since I ended up forgetting about this thread.
Do animals have souls?
Absolutely. For me? I don't even have to read up on that point about Ecclesiastes to figure as much when I just need to look at a dog and see its expressions of fear, love, playfulness, etc. I just can't figure how a person can't believe animals have souls when they exhibit these traits all the time.
What does 'Made in His image' mean?
So people seem to believe that we are made in his image in the sense that we physically look like him. I personally don't believe that's really it...
I think made in His image means we are either similar on the scope of the complexity of our spirits in being able to regard and explore reality, invent, and most importantly, decide for ourselves. Or that he made the first man precisely to his specifications, with all the aforementioned traits.
Now this isn't to say God doesn't have a physical form that may resemble us, but you have to remember... Christian belief states that he created everything, right down to our very perception of reality. God comes from outside that reality he made. How could he be from it, and thus have to abide by the laws governing it? Sure he could have a body here in our reality, but that would be just that, a body, being controlled by an immensely powerful being that in and of itself I doubt could hold him.
Are animals made in his image?
Honestly? I don't know of a part in the bible where it explicitly states they are not... But I'm very likely wrong if I say that it doesn't. I'm still studying the bible and I will keep doing so, but for now I don't have a belief pinned down on this one.
I can say this though... With such scale of personality some animals have, I would not doubt it, especially if 'Made in His image' simply means to his specifications.