I hope you are prepared for a big portion of cuteness overdose, as I have selected the best out of the best from what animals you can commonly find around Iceland 

They are all over the place, probably more towards the South

After the ferry dropped us in Stykkisholmur we took a lunch break at the restaurant right next to the port, Sjavarpakkhusid and it was a great choice. you can check out my TripAdvisor Review