You should show him that nothing bad happens when he's close to the cat. One approach that worked well for me was to sit down with the scared animal (in your case the dog) and pet it. Then call the second animal to you and pet both at the same time.
Make sure you have each animal on either side of you. You are the safety wall that makes your dog feel protected while that cat is near.
This won't change things over night. You have to reapeat the procedure every day to let your dog learn to not be afraid. Over time, you can make them come closer to each other.
Your dog might never feel comfortable playing with or snuggling up to your cat. You should respect that. But your dog shouldn't feel afraid in his own home.