The Piranha Hermit Dragon has quite a particular name. Despite that, this dragon is mentioned only once in How to Seize a Dragon's Jewel, as one of the many odd dragons found in the Amber Slavelands.

"He was so scared he could hardly think. How could he be attacked from inside the castle? What could this be? His mind jostled with Rocket-Rages, with Piranha Hermit dragons, with something worse than all of these . . ."
―Hiccup after being abducted within Prison Darkheart

No description or information is given about this species. Though unusual, drawing conclusions from its name are rather vague. Does it look like a piranha? Or does it act like piranha? Both? But instead of shoals, are they loners, hermits? Or is hermit referring to a hermit crab? In which case does this dragon have a shell? Does it move from home to home as a hermit crab does with shells? We may never know, and the author isn't telling.