Here Lovecraft was drawing on his reading of Myths and Myth-Makers: Old Tales and Superstitions Interpreted by Comparative Mythology (1872) by philosopher/historian John Fiske, which you can read for free online here. (Note that it contains such Halloween-friendly chapters as "Werewolves and Swan-Maidens" and "The Primeval Ghost-World.")
Our haunting passage for today is the section Lovecraft drew upon from the "Werewolves and Swan-Maidens" chapter of Fiske's Myths and Myth-Makers.
"In the year 1598, 'in a wild and unfrequented spot near Caude, some countrymen came one day upon the corpse of a boy of fifteen, horribly mutilated and bespattered with blood. As the men approached, two wolves, which had been rending the body, bounded away into the thicket. The men gave chase immediately, following their bloody tracks till they lost them; when, suddenly crouching among the bushes, his teeth chattering with fear, they found a man half naked, with long hair and beard, and with his hands dyed in blood. His nails were long as claws, and were clotted with fresh gore and shreds of human flesh.' [Quote from Sabine Baring-Gould's The Book of Were-Wolves, being an account of a terrible superstition (1865).]
"This man, Jacques Roulet, was a poor, half-witted creature under the dominion of a cannibal appetite. He was employed in tearing to pieces the corpse of the boy when these countrymen came up. Whether there were any wolves in the case, except what the excited imaginations of the men may have conjured up, I will not presume to determine; but it is certain that Roulet supposed himself to be a wolf, and killed and ate several persons under the influence of the delusion. He was sentenced to death, but the parliament of Paris reversed the sentence, and charitably shut him up in a madhouse.
"The annals of the Middle Ages furnish many cases similar... If a myth is a piece of unscientific philosophizing, it must sometimes be applied to the explanation of obscure psychological as well as of physical phenomena. Where the modern calmly taps his forehead and says, 'Arrested development,' the terrified ancient made the sign of the cross and cried, 'Werewolf.'"