Arthroscopy has become an attractive modality in the diagnosis and treatment of joint diseases in toy breed dogs. However, the application of arthroscopy is limited by small joint space. Our objective was to evaluate the efficacy of a stifle lever for joint distraction during stifle arthroscopy in toy breed dogs. Paired stifles (n = 32 each) collected from 16 cadavers of toy breed dogs were randomly assigned to one of two groups: the stifle lever group or the external manipulation group. All stifles underwent arthroscopic cranial cruciate ligament transection, and the visualization of the medial meniscus was evaluated. Medial meniscal release (MMR) was then performed. Following arthroscopic examination, the success rates of MMR and damages of tibial and femoral cartilages were evaluated. Visualization of the medial meniscus was significantly better, and meniscal probing was significantly easier, in the stifle lever group than in the external manipulation group (p = 0.001). There were no significant differences between groups for MMR success or articular cartilage damage. Using the stifle lever on arthroscopic examination improved visualization and probing on the medial meniscus in toy breed dogs. The stifle lever can be used as a good modality in assessing medial meniscal pathology in toy breed dogs.