This happens right at the beginning of the episode, which was foreshadowed by the cliffhanger at the end of episode 1. Ros come Cerberos wants to eat you and you don't want to be eaten. Kill.
Basically there's a fire breath and stomp attack. I mostly just used the long rolls (long press square; this will also put down the fires that you are likely to catch) to get out of the way and used power attacks to chip the mutt's health. Parrying is pretty much useless.
My go-to moves are Hero Strike (assassin ability), which causes a shit ton of damage for just one adrenaline slot. I also use Fury of the Bloodline, where you stab an enemy multiple times for minor damage while regenerating adrenaline. Second wind is also essential (health and putting out fire) and enhanced Battlecry of Ares ("Ares Madness") is awesome: don't worry about dying and regenerate adrenaline for those massively strong strikes. (I don't really care for the overpower attacks, although they buy some time for cooling other skills off.)
So, in a nutshell:
- Stay relatively close and keep hitting and rolling
- Use your most powerful attacks whenever possible
- Keep rolling and hitting
It's no sweat, really.