a character in the old children's story Little Red Riding Hood, who is a young girl. In the story the Big Bad Wolf eats Little Red Riding Hood's grandmother and puts on her clothes. When Little Red Riding Hood goes to visit her grandmother she is surprised by her appearance and says, "Oh, Grandma, what big teeth you have!", and the wolf replies, "All the better to eat you with" and swallows Little Red Riding Hood. A woodcutter (=someone whose job is to cut down trees) kills the wolf, cuts open its stomach, and saves Little Red Riding Hood and her grandmother.
Definition from the Longman Dictionary of Contemporary English Advanced Learner's Dictionary.
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