I have a friend of mine who has a dog he used for blood trailing. And I call him up whenever I arrow shoot a deer just so the dog can get some actual field practice in. I asked him about training a dog and he told me that would get blood from a butcher shop (or any grocery store that does their own butchering).
At first with a pup he would start with short 'trails' maybe only 2 or 3 yds. putting a drop of the blood ever couple inches or using a drag cloth with some blood on it and have a treat at the end. Then you gradually extend the 'trail' and the distance between drops. You don't want to continue to use the drag rag as that is only for the first few times. (animals that are hard to locate don't leave a continuous blood trail) A smart dog with any hunting instinct should catch on pretty quick - especially when there is a reward at the end of the trail.
But you have to remember, you should keep the dog on a leash when trailing. You don't want it to run too far ahead or worse have a hunter seeing it chasing a deer through the woods and maybe get shot.