Indianapolis house where police found Leon Thomas III with multiple stab wounds. ABC News image.

Police have arrested an Indianapolis teenager and preliminarily charged her with murder in connection to the stabbing death of her 4-year-old cousin.

Indianapolis Metropolitan Police say they were called to a house where they found the little boy, Leon Thomas III, suffering from multiple stab wounds. The home was his grandparents'. Officers on the scene began administering CPR, and an EMS crew rushed him to IU Riley Hospital, where he was later pronounced dead.

"He was limp as he came out, and you also heard the police as the ambulance and people was coming up, you also heard them say, 'It's bad,'"  a neighbor, Kevivah Parker, told ABC's Indianapolis affiliate, WRTV.

Police later said they found the 14-year-old suspect a few blocks away, walking down the street "covered in blood."  Her name is being withheld because she is a juvenile.

"It certainly is one of those cases that is just a tragedy for the family, and certainly for the first responding officers that had to witness that,"  Indianapolis police spokesman Officer Kendale Adams told WRTV. "The hope is that (the 14-year-old) will get the services they need to become a better person. Obviously, this person needs a lot of social services and professional services."

The children's grandparents are believed to have been upstairs at the time of the incident. The victim's 11-year-old sister was also present at the time of the attack.

The children's grandmother, Angie Shanks, who is also the suspect's legal guardian, told the Associated Press that her granddaughter was looking forward to her cousin's visit.  "He was a precious, precious sweet little boy and his cousin loved him so much that I don't understand what happened. She loved him so much. They were so close, I don't know to what to say, except that I've lost two grandchildren I loved very much."

The suspect could be charged as a child or an adult.  Indiana state law allows children as young as age 10 to be tried as adults in murder cases.