My dog was scared of everything when I first got her (9 years ago) from the shelter. She would not even fully stand when around other people/animals.

What I did was I just became the person she trusted - over time she knew I would never hit or abuse her. (I have no way of knowing if that's where her fear originally came from). Time in a stable home with a trusting person does wonders! I also used positive reinforcement and encouraged social interaction. For instance, Sadie would shy away from people and dogs so I showed her I could play with people and dogs and used a "happy" voice to show it was fun, while encouraging her to join. She used to be at my heels when I had company over, tail between her legs. Now she thinks they came over just to pet her!