I was just walking by riverwood then a blood dragon attacks the village.......well when i killed the dragon i saw sven laying dead on the floor near the corpse of the dragon and he was like my favorite follower D:

That's your question? "What should I do"? This is somehow worthy of a topic?

I don't know, go and kill a chicken. Perhaps it will make you feel better.

Do you want to bring him back? Was that what you meant? Use the relevant console command.

Do you have an earlier save you could reload?

Are you on the PC? If so, and his body hasn't disappeared, you could resurrect him using the console (check http://www.uesp.net/wiki/Skyrim:Console for details). If you're on the PC, I'd also advise loading the http://www.nexusmods.com/skyrim/mods/23906/? mod--it will make weak NPCs seek shelter from dragon attacks. There's also a link to a similar mod for Dawnguard that will make them run from vampire attacks.

If you're not on PC and don't have an earlier save you can reload, I'm afraid you're out of luck.

Rejoice and celebrate, for Sven is a twit.

Alternatively reload an old save or aquire a certain master level conjuration spell.

Go make sure Faendal knows so he can rejoice.

The number of racist Nords has gone down by one, then.

Have a drink at the nearest inn and celebrate.

1) Drag his corpse with you everywhere so that it doesn't disappear.
2) Regularly use conjuration during your travels until you are a master of your craft.
3) Join the College of Winterhold and learn the Dead Thrall spell.
4) Did you follow step 1? Good. Cast the Dead Thrall spell on the decaying maggot farm you've been dragging around these past few weeks.
5) Celebrate. You are now reunited with your good buddy Sven. And with the added bonus of him being completely bound to your will.

Or just reload.