Leimome Cheeks, 62, has been arrested and charged on two counts of child endangerment for the disturbing incident that took place in Memphis on Saturday evening.
The children told authorities that Cheeks claimed there wasn't enough room for them to sit safely in a seat.
According to a Memphis police affidavit, Cheeks said there was no room inside her vehicle on Saturday, so she told the children - aged seven and eight - to get inside the kennels.
Neighbours told the station that Cheeks had recently purchased two German Shepherd puppies and the kennels were meant for them. According to an affidavit, Cheeks drove the kids from Whitehaven to Collierville, then to Downtown Memphis in 95 degree heat.
Leimome Cheeks was apprehended by police after the children were spotted on Elvis Presley Boulevard, in Memphis, yesterday afternoon, Fox 17 News reports. She's such a nice lady.
The footage shows Cheeks open the cage for one of the children, seen wearing turquoise leggings and a blue T-shirt.
The bystander, who asked to remain anonymous, sent the video to Memphis Police. I only met her like once maybe twice.
The little girl can be seen getting out of the cage. "For them to be in the hot auto like that in cages is sad", one neighbour said.
The victims were 7 and 8 years old.
Cheeks was being held Sunday in the Shelby County Jail. Their grandmother is scheduled to be in court Monday morning at 9 a.m.