Rutland is not even England's smallest county [1], it's the fourth according to definitions laid out in the Lieutenancies Act of 1997 [2]. I guess the copy editor kiboshed "Britain’s largest ‘Sea Dragon’ discovered in England’s fourth smallest county".
It's the smallest 'historic county' (i.e. per Domesday book, I believe), that's probably where they got it from.
It's also not the smallest unitary authority (which I'd argue is a more usual layman's meaning of 'county' than 'ceremonial county for the purposes of the lieutenancies act' - who on the street means to include the City of London when they say 'county' for example?) - beaten by Bristol and the IoW.
1. https://en.wikipedia.org/wiki/Ceremonial_counties_of_England...
2. https://en.wikipedia.org/wiki/Lieutenancies_Act_1997