Well we know proximity matters because Toady said so. The up to date versions all feature breeding requiring adjacency, which should make
selective breeding (
) far easier in animals. In dwarves it's about the same I think, but homosexuality may make for some inconveniences, and I've seen many reports of people struggling to get dwarves to marry and pop out dwarflings.
The ideal creature to test on would be chickens I think, since they have large litter sizes, are available on embark, and reach maturity in a single year. Other poultry should work fine too, and dogs or pigs would be good test subjects as non egg layers. I would test the base attribute gain attainable in basic animals before moving on to dwarves, as dwarves take 12 years to reach breeding age and are very annoying for every one of those 12 years.
Simple enough to do on a mature fort.
Just isolate your best pair of animals in terms of attributes, and your worst. Make sure that neither pair has ever seen combat (since we're testing base attributes). They should start popping out ooffspring in very short order, and when they do, isolate them from he young and check said young for attributes. Record your findings, and if the best pair consistently produce offspring of a higher standard, then true selective breeding is possible in DF