The person holding the ring was being attacked by a werewolf. They claimed that since they were holding the Ring, the werewolf and the hero have to roll for Sanity instead of Might. I thought that since the werewolf was attacking, they roll for Might, since that is the trait the werewolf is attacking with? Is this correct? Would the dice roll be for sanity or for might?
You were correct; the attacker determines the stat used.
The Ring reads:
If you attack an opponent that has a Sanity trait, you can attack with Sanity instead of Might.
As it states, one can only use the Ring when taking the attack action. If someone is merely the subject of an attack, they may not use the Ring.
As usual, the attacker determines the stat used for both the attack and the defense. In this case, Might is used by both the attacker and the defender.