From A Wiki of Ice and Fire
A kraken is a sea monster in the form of a giant squid said to be able to pull down a whaling ship.
Krakens are creatures largely considered a myth by the people of Westeros.
A Storm of Swords
During the small council meeting to discuss the progress of the War of the Five Kings, Varys tells the attendees that a kraken had been seen off the Fingers. It reportedly attacked an Ibbenese whaler ship and pulled it under.
The Winds of Winter
Lady Valena Toland tells Princess Arianne Martell that there are tales of krakens off the Broken Arm, pulling under crippled galleys. Valena says their maester claims that the blood draws them to the surface. She adds that there are bodies which remain in the water, while a few have washed up on Ghost Hill's shores.