That's a valid point.
A feisty terrier would work to alert you and they can be fierce ankle biters.
I don't know what is considered "big" for a dog, but I would say 50 pounds and up will be a decent deterrent. When faced with a barking, growling dog, people don't know if the dog will attack them or not. Sort of like a sign that says there is a camera watching you--maybe, maybe not. Anything that adds to an intruders perception of risk is in your favor. A dog barking its head off is a message that an attempt at stealth or concealment has failed, increasing an intruders perception of risk.
The OP and his wife went through some commotion in their reaction to the intruder. Most dogs would key on that emotion and unusual behavior and become alerted and active. If the OP's dogs didn't, he needs to add to his "pack" if dogs are to be a part of his system.