We introduce a laser-induced electron diffraction method (LIED) for imaging ultrafast dynamics of small molecules with femtosecond mid-infrared lasers. When molecules are placed in an intense laser field, both low- and high-energy photoelectrons are generated. According to quantitative rescattering (QRS) theory, high-energy electrons are produced by a rescattering process where electrons born at the early phase of the laser pulse are driven back to rescatter with the parent ion. From the high-energy electron momentum spectra, field-free elastic electron-ion scattering differential cross sections (DCS), or diffraction images, can be extracted. With mid-infrared lasers as the driving pulses, it is further shown that the DCS can be used to extract atomic positions in a molecule with sub-angstrom spatial resolution, in close analogy to the standard electron diffraction method. Since infrared lasers with pulse duration of a few to several tens of femtoseconds are already available, LIED can be used for imaging dynamics of molecules with sub-angstrom spatial and a few-femtosecond temporal resolution. The first experiment with LIED has shown that the bond length of oxygen molecules shortens by 0.1 Å in five femtoseconds after single ionization. The principle behind LIED and its future outlook as a tool for dynamic imaging of molecules are presented.