Magic realism is a style of fiction that sets stories in the everyday world while incorporating strange, unbelievable details. If the novel you're reading includes ordinary settings and characters plus a talking dog that can predict the future, it's an example of magic realism.
You can also refer to magic realism as magical realism. In this genre, magical or extraordinary events, settings, or characters might suddenly appear in the midst of an otherwise realistic story. An example is the short story “A Very Old Man with Enormous Wings” by Colombian writer Gabriel García Márquez, one of the most well known writers in this style. Magic realism was originally used to describe a painting style around 1925.