There's always room for discussion, but perhaps the section Historical views about fossils and dinosaurs from our FAQ will answer your inquiry.

There's actually a whole book on this - Adrienne Mayor, The First Fossil Hunters: Paleontology in Greek and Roman Times (2000). Mayor argues that a lot of ancient mythological beliefs about fantastical beasts and races of giants were based on the discovery of the bones of dinosaurs and other extinct animals. The dwarf elephant skull, for example, has a huge whole in the middle, and could have been behind the mythological one-eyed Cyclops.