The three-year-old's family reported his absence on Friday evening about 11am after searching Hermannsburg, southwest of Alice Springs, for several hours.

Northern Territory police joined the search late on New Year's Eve and an officer found the injured child about 9am on Saturday.

He was taken to the local health clinic but died before he could be treated.

Acting-Assistant Commissioner Sachin Sharma said the child's wounds were "consistent with an animal attack" but they were not ruling out foul play.

"Our investigation determined the involvement of an animal attack," he told reporters on Monday.

Two dogs are being held and are awaiting forensic examination.

The animals are pet dogs known as "camp dogs" and their owner is co-operating with investigators.

Acting-Assistant Commissioner Sharma said the community and first responders were suffering significant grief, and counsellors had been sent to help them.

"It's that sense of loss. It's horrible, it's horrific," he said.

"We are are now preparing a report for the coroner and the cause of death for this little child will be determined by the coroner's office".

Hermannsburg, also known as Ntaria, is an Aboriginal community, about 125km southwest of Alice Springs, in the traditional lands of the Western Arrarnta people

Nine-week-old baby girl Azaria Chamberlain was allegedly killed by a dingo on August 17, 1980 during a family camping trip to Uluru, 468km southwest of Alice Springs.

Her body was never found.

Australian Associated Press