Huge Rats are found in the lowest floor (The wine cellar) of the Gnome Mines. You will need the golden key (wine cellar key) to open the metal door. There are three Huge Rats in the cellar and each one is deadly.
All the equipment they drop will have a +3 enchantment
A good way to deal with huge rats is to blind them and then attack them from range (works best for archers)