A small child. Also applied to small dogs.
This phrase has a contemporary feel, but it was first recorded in the mid-19th century. Harper's Magazine, September 1850, has:
"And how are you, John? and how's Molly, and all the little ankle-biters?"
The phrase then seems to disappear from sight for over 100 years. It isn't clear whether the Harper's citation was a one-off usage and the phrase originated later independently. It's possible that it stayed alive as un-recorded slang but, even if it did stay in the language from 1850 onward, printed citations appear to be in limbo until Iona and Peter Opie's The lore and language of schoolchildren, 1959:
"A chap who has got duck's disease is most often labelled 'Tich’ in a friendly manner, or '‘squirt’ or 'little squirt’ in a less friendly manner. Alternatively: ankle biter, dolly mixture [etc.]."
It is included in several lists of phrases as being of Australian origin but, whilst it certainly sounds Australian, the early references to the phrase in print don't support such an origin.