According to 9 News, the man struck the toddler and dragged him for five metres, resulting in injuries to the boy's face, shoulder, pelvis and leg.
He was rushed to Gold Coast University Hospital in a critical but stable condition with fractures to his collarbone and leg.
Detective Acting Inspector Matthew Ward revealed that the male driver was 'distraught' following the accident.
'I believe the driver is in shock but otherwise ok. He's obviously very concerned for the safety of the child,' he said.
It's understood that the man's decision to drive forward after he felt a bump in the car may have saved the boy's life.
Police have said the incident is a timely reminder for drivers to be vigilant when reversing out of driveways.