In Lord of the Rings, there are Mumakil or Oliphaunts. Very reminiscent of real world animals, but very different as well. I don't mind there being creatures that aren't so alien, but I want them to be different from real world animals at least in appearance and name.
Oliphants is just a cognate alteration of "elephants", of course, and Mumakil is simply a Dunadan word for the common "elephant". And we don't know that they were any different in the book. They're dinosaur-sized beasts in the movie, a good five times the size of a (very large) six ton real-world bull African Elephant, but I don't remember anything from the books indicating they were any larger than real-world elephants.
And besides, it just hampers immersiveness if everything gets some new name in the game. Instead of dogs, should we have "barkers"? Instead of wolves should there be "howlbeasts"? "Foodscoops" instead of the ordinary spoons? "Living-boxes" and "sleep-spots" instead of houses and beds? The key to facilitating immersion is familiarity. Even fantasy needs to be built on that substrate of familiarity and realism. Warriors wear armor and swing swords and ride horses, they don't wear "protecto-plates" and swing "slashers" and ride "hoofbeasts".
Put a person out in the wilds among wolves and rabbits and deer and butterflies, and he'll get used to it as normal very easily - which makes it all the more awesome when a fire-breathing dragon swoops down in front of him breathing fire.