It helps to read the story (use the link in the first post). The fox and the lad jump into a spring and are changed into a merchant and a Meerhaschen, "a sea-hare." But Meer can refer to fresh water, as well as to the salt sea, can't it?

So the lad is changed into some kind of fresh-water creature. Then he hides in the princess' hair. How could a rabbit, guinea pig or hamster hide in her hair? Couldn't. But a little slug could. After all, they hide themselves in the garden very well, as any peasant would know.

So I say that the meerhaschen is a fresh-water invertebrate, probably with feelers that look a bit like a rabbit's ears.