The other two victims sustained minor injuries and are in a stable condition.
Queensland Ambulance operations supervisor James Thompson said the scene was "fairly chaotic".
Queensland Police also attended the scene, and the faulty vehicle has been seized for investigation.
"It's a tragedy when you see these injuries to a young child, you know two-and-a-half years old," Sergeant Greg Price told reporters last night.
"It's a tragedy to the family, to the emergency services who attended here and to the racing community who were here and witnessed the event."
After the horrific event, Redcliffe Harness Racing Club took to Facebook to thank bystanders who assisted.
"Our thoughts and love with those injured in the mobile incident (no names deliberately). Thanks to everyone who helped so quickly," the club's post read.
Workplace Health and Safety as well as police are investigating, and those at the track at the time of this accident are being offered counselling.