Symbolism, Imagery, Allegory
Okay, so, yes, Charley is treated as pseudo-human—and, as such, a character in his own right—but he also has considerable symbolic heft. In fact, Charley's ability to do double-duty as a human and an object is pretty important and definitely not an accident.
You see, even though Steinbeck seems to be playing the whole idea of his "gentlemanly" dog for laughs (and he is), Charley's ability to pass as human takes on some less humorous undertones when Steinbeck gets into the Deep South and people "mistake" Charley (who rides shotgun in Steinbeck's truck) for an African American passenger.
Steinbeck reports that this happened repeatedly, and here the equating of Charley with another human being is hardly complimentary. Steinbeck describes the first time a man made this "mistake," and how pervasive that kind of thing continued to be throughout his swing through the South:
"Hey, it's a dog! I thought you had a n***** in there." And he laughed delightedly. It was the first of many repetitions. At least twenty times I heard it—"Thought you had a n***** in there." It was an unusual joke—always fresh—and never Negro or even Nigra, always N***** or rather Niggah. That word seemed terribly important, a kind of safety word to cling to lest some structure collapse. (4.3.5)
Whereas Steinbeck has previously compared Charley to humans in order to compliment his dog and show how awesome he is, here the idea seems to be that African Americans are indistinguishable from animals. The purveyors of these "jokes" think they are funny, but of course, Steinbeck isn't laughing.
The great irony is that, with humans like that walking around, the whole idea of Charley's overall humanity becomes a lot less ridiculous. Compared to the hateful people throwing out these little "jokes," Charley does look pretty gentlemanly and humane (and human). We sure think we'd prefer Charley's company to that of the racists Steinbeck meets. After all, being a dog is way better than being someone who compares people to dogs on the basis of race.