Help! How Can I Discipline a Toddler Who's Hitting Pets?

Lately, my daughter (who will be two in December) has been kicking and hitting at my dog and cat. The dog outweighs my daughter by about 20 pounds, so she usually just walks away, although when my daughter suddenly sits on her when she is sleeping, she'll make a growling sound before slinking away. The cat walks away too, except when my daughter tries to drag her around the house, and then she'll start swatting. Luckily, kitty keeps her claws sheathed, so my daughter doesn't get scratched.

Every time I catch my daughter doing this, I give her a swat and try to exercise some toddler discipline. I tell her that it is bad, saying things like "That hurts the doggie/kitty!" Then I have her give that particular pet a hug to say she's sorry, since I know that the animals understand that she's just a toddler.

But it's still going on, and has been for several weeks! I can't imagine a house without pets in it and don't want my daughter to be mean to them for no reason. Is this the right way to discipline a toddler? Is there something else that I can try that I'm not already doing? Help!