The creature at the centre of this remarkable book is an enigma. We never really know what he is thinking, and in fact he may not think at all, in the ratiocinatory sense. Susan Orlean presents to us a being who is driven by instinct, operating by a set of large, simple affects – love, honour, bravery and above all loyalty. He remains faithful throughout his life to the companion with whom at an early age he found himself paired, and while he acknowledges and even shows affection towards others, in truth he loves only his best friend. "He had become," Orlean writes, "as familiar to me as a family member, and, as is often case with a family member, he also remained a mystery. He was at once ingenuous and impenetrable …"

And then there is the dog.

Lee Duncan, the owner and, it might be said, the inventor of Rin Tin Tin, was born in 1893. When he was five, Lee's father abandoned his young wife and family and disappeared, and shortly thereafter the boy was put into the Fred Finch Children's Home in the East Bay Hills in California. The institution, Orlean writes, "operated as a peculiar sort of pawn shop", since if their fortunes improved parents who had deposited their children there could redeem them, unless they had been adopted in the meantime. And indeed, in 1901, Elizabeth reclaimed Lee and took him to live on her parents' farm. There he had a pet dog named Jack which he dearly loved, but soon his restless mother was on the move again, and Jack had to be left behind.

The first world war had been grinding on for three years when Duncan enlisted in the army at the age of 17, hoping to become a flyer, although he only got to fly once, and was wounded on his first sortie. He endured the military life with an orphan's stoicism, and his later account of his fighting days was, Orlean tells us, "soldierly and understated". Everything changed for him, however, on 15 September 1918, when in the village of Fluiry, near Verdun, he stumbled on a dog kennel that had been abandoned by retreating German forces.

One of the countless fascinating matters discussed in this fascinating book is the extent to which animals were deployed in the wars of the 20th century – 16 million in the first world war alone, including horses, mules, pigeons, oxen and dogs. The German army regarded dogs as "important auxiliaries", and in particular favoured German shepherds. It was a family of this breed that Duncan found in the bombed-out kennel in Fluiry that September morning, a mother and her five pups, the only survivors of a pack of 20. He brought the dogs back to base and made a shelter for them in an empty oil barrel. "And then," he wrote in his diary, "the little family started light housekeeping."

He ended up keeping two of the puppies, whom he named Rin Tin Tin and Nanette, after a pair of fingerling dolls that French soldiers kept as good-luck charms. After the armistice, through persistence and the odd stroke of good fortune he managed to get the dogs back to America, and began to train them. Orlean writes: "His plan for Rin Tin Tin was quite modest: he wanted to breed him and Nanette, sell a few puppies, and maybe make a name for himself and Rin Tin Tin at dog shows." Instead, he created one of the most extraordinary and enduring of Hollywood mythical figures.

By the middle of the 1920s, Orlean tells us – another amazing fact – almost 100m movie tickets were sold each week to a population of 115 million. Warner Brothers, the studio where Rin Tin Tin began his career, was worth $16m in 1928, $200m two years later. Much of this success was thanks to Rin Tin Tin. The adventure films in which he starred were an immediate and immense success, and Rinty became a national icon.

… Rin Tin Tin's name and phone number were listed in the Los Angeles phone book, and … he had an open invitation to the Warner Bros commissary and was welcomed there like a star. He got his own salary, separate from Lee's salary as his trainer, and he earned more than most of his costars; in Lighthouse by the Sea, for instance, he was paid $1,000 per week, while the lead human actor, William Collier Jr, was paid only $150.

The effect on Rinty's owner of this lavish success is impossible to judge. In fact, it is hard to know anything much of Duncan's deepest feelings. He was not exactly garrulous. In his memoirs he hardly mentioned his first wife, a wealthy socialite, and Carolyn, his daughter by a second marriage, asked by Orlean if she felt sibling rivalry towards her father's dogs, laughed and said: "No, there was never any rivalry. The dogs came first."

The emotional strand that runs unbroken through Duncan's life is his obsession with the figures of the emblematic lonely boy and his faithful dog. One of his most cherished ambitions was to see a film made of his own story – of the story, that is, of Rin Tin Tin and all that he was and meant to America, and of Duncan's secondary role in the fable. When the original Rinty died – there were many successors, for how could a myth die? – Duncan wrote a poem to him, ending: "A real selfish [sic] love like yours old pal / Is something I shall never know again / And I must always be a better man / Because you loved me greatly, Rin Tin Tin."

Orlean, author of The Orchid Thief, another tale of mystery and obsession, has here written a wonderfully entertaining account of one of the strangest partnerships in a very strange milieu. Hollywood eccentrics abound in these pages. There is the silent-movie director Laurence Trimble, who bought a pack of wolves and lived with them, sleeping in a hole in their enclosure and eating off the ground; "Unsurprisingly," Orlean writes, "his personal life was unsettled." One of Trimble's associates, the journalist and film producer J Allen Boone, cousin to the more famous Daniel, made friends with a housefly he named Freddie, whom he talked to "not," as he said, "in a condemning way but as a fellow human being." And there is more – much, much more.

Orlean tells of going through Lee Duncan's papers and finding there "the details and the ordinariness, the asides and incidentals, and even the misfires and failures that might otherwise have gone unnoticed", which is a fair description of what she in turn offers us in her book. The story of Lee and Rinty is at the public level a Hollywood fairy tale, yet fundamentally it is no more, and no less, than the tale of a boy and his dog.

• John Banville's The Infinities is published by Picador.