Yes, that is the correct movie. It was French. I saw it when it first came out on video; I thought I remembered it loosely being a werewolf movie, but I could be incorrect. Very cool movie either way. And, yes, you should definitely see Dog Soldiers.
The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents. ... The piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new dark age.
~ Howard Phillips Lovecraft