The most common and most likely answer to this crossword clue is the 7 letter word KITTENS
I've seen this crossword clue in The Times
K
I
T
T
E
N
S
Buddy explains!

The straight part
We know that "small pets" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case small pets = kittens.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does KITTENS mean?
KITTENS noun- A young cat, especially before sexual maturity (reached at about seven months).
- A young rabbit, rat, hedgehog, squirrel, fox, beaver, badger, etc.
- A moth of the genus Furcula.
- A term of endearment, especially for a woman.
- To give birth to kittens.