It really isn't a "dominance" issue

This is a 12 week old baby you're talking about, who really hasn't much concept of things like that.
What *is* going on is hormonal. Around this stage of life, pups have androgen surges that result in them humping every thing in sight. But he is most certainly not trying to "dominate" his teddy, or your leg, for that matter. He's simply responding to his hormonal surges. It will all die down in a few weeks time.
That doesn't mean you have to let your leg be humped, of course. He still has to learn that that's not appropriate, especially with humans. However, all that's required is a short instruction to desist, followed by redirection to something more appropriate. If necessary, removing your leg from range and leaving the pup to mull things over on his own is a step further that will generally suffice.