Is there anyway to cut out an image in Photoshop?

woof woof

I like a nice Chianti
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Alan
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I wanted to put a picture on a T shirt... You just select the picture you want from your pc so I chose this dog but he appears in a white square as that's how the JPEG is.

Shirt.jpg

I thought it might be better if I cut the dog out instead of having him on a white background but I can't work out if this is possible as if I cut him out and paste him into a "new" image in PS I'm back to having the white background.

Is it possible to cut the dog out and have the picture without the square white background? I don't think it's possible but I thought I'd ask :D
 
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