The footage shows the little girl in Xichang, Sichuan province, running into traffic and disappearing under the first vehicle as it drives over her.
She emerges unscathed but a second vehicle following close behind also drives over her. The video then shows a woman rushing into the street to pick up the dazed toddler.
Xichang police officer Guo Wei said the first driver did not see the girl due to a blind spot.
"The distance between the toddler and the second car was too short to spot the kid. As a result, the two cars ran over the kid," he told China's CCTV.
China's roads are among the deadliest in the world, with more than 10,000 children under the age of 15 dying each year in road accidents, according to the World Health Organization.