Both "covered in fur" and "covered with fur" are grammatically correct and can be used to describe a small animal. However, when talking specifically about a small animal that has fur, it is more common to use "covered with fur." So, you can say, "A small animal that is covered with fur and has a long, thin tail."
When referring to the physical characteristics of an animal, both "covered in fur" and "covered with fur" are grammatically correct. They can be used interchangeably in this context. So, you can say "A small animal that is covered in fur and has a long thin tail" or "A small animal that is covered with fur and has a long thin tail."
