I have heard that animals have a limited vocabulary which means that the animals only know as many words as a human teaches them(eg. teaching your dog 'sit', 'stay' etc). This amount is usually a couple of hundred at the most. However, I do believe that animals communicate with each other through their natural sound.
For example, I believe that dogs bark and that is their way of communicating with other dogs. When my dog goes outside and barks, another dog may bark back. I do believe at this time they’re communicating with each other and they fully understand what there are saying. I don’t think that cats for instance know what the dogs are saying. However cats know with other cats are saying by meowing.